Vietnam Freight And Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Vietnam Freight And Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Vietnam Freight and Logistics Market is estimated to grow at a CAGR of approximately 7% during the forecast period. The logistics market in the country is in its transition stage and the demand for logistics is rising strongly. The country is establishing itself as an export-driven economy. The government is encouraging business in the manufacturing sector and is attracting investments in this sector, by establishing economic zones and industrial parks.

In the coming time, it is forecasted that Vietnam's logistics industry will face many difficulties and challenges due to the impact of the Covid-19 epidemic, sea transport will lack empty containers for export (due to the impact of the pandemic). global social distancing), freight rates tend to increase.

Besides difficulties and challenges, Vietnam's logistics industry is facing many opportunities from free trade agreements and the strong development of e-commerce. High economic growth, increasing domestic manufacturing, the rise in consumption, and booming e-commerce are some of the key drivers of the Vietnamese freight and logistics market. Weak transport infrastructure and high logistics cost remain to be market restraints. Contract logistics is one of the key trends in the Vietnamese freight and logistics market.

The booming e-commerce in the country presents an opportunity for start-ups with innovative technologies demanding more efficient logistics services, especially in the areas of last-mile delivery and value-added services. The logistics market in Vietnam is becoming more liberalized, creating opportunities for new companies to cash in on the rising demand.

Key Market TrendsHigh economic growth and increased consumption leading to rise in trade

The economy of Vietnam is one of the fastest growing in the region, and the country has become a hotspot for investments and trading. Vietnam is a member of the Association of Southeast Asian Nations (ASEAN) and a member of ASEAN Free Trade Area (AFTA). As part of AFTA, ASEAN members (including Brunei, the Philippines, Indonesia, Laos, Myanmar, Malaysia, Singapore, Thailand, and Cambodia) are driven to making this region a competitive trading area. All the sectors of the country are witnessing strong growth rates and are attracting foreign investments. Besides these, the rise in consumption has been demanding more flow of goods into the country.

The e-commerce sector in the Southeast Asian region is witnessing high growth in the recent years. This growth in e-commerce is simultaneously leading to demand for last mile and express delivery services. Although there is much need for investment of capital in the logistics sector of the country, the strong growth of the e-commerce sector has been attracting investments.

The rise in demand for logistics services arising from e-commerce also necessitates the transformation of the supply chain. The growth in smartphone penetration in major cities across Vietnam has contributed to the significant growth of the domestic e-commerce market. Many e-commerce companies are picking up the pace to keep up with the demand from customers.

Healthcare segment demanding for logistics facilities

With incomes rising among its rapidly aging population, Vietnam is a booming market for pharmaceuticals. As life expectancy improves, a greater number of the Vietnamese population is likely to suffer from chronic diseases related to old age, which, in turn, is estimated to increase the demand for pharmaceuticals.

Despite the demand, domestic production of needed drugs is still nascent. Vietnamese remain largely reliant on imported drugs, particularly when it comes to sophisticated, high technology products, and active pharmaceutical ingredients.

Several local firms have sought ways to co-operate with foreign companies to take advantage of available markets and distribution channels instead of directly competing. Co-operation can help domestic firms attract capital and gain technologies and experience from big global groups.

Greater demand for healthcare services combined with strained government public resources provide opportunities for a growing healthcare industry in Vietnam. The European Union–Vietnam Free Trade Agreement (EVFTA) and the amended Law on Investment will benefit foreign producers and suppliers wishing to enter the Vietnamese market, which still largely relies on imported medical equipment and medicines.

Competitive Landscape

The logistics market landscape of Vietnam is highly fragmented in nature and most of the players are small- and medium-sized firms providing low-value-added logistics services. There are more than 3,000 logistics companies, and 90% of them have a registered capital of less than VND 10 billion. Only 5% of these have a capital in the range of VND 10-20 billion, while the remaining have more than VND 20 billion.

The competition between the domestic logistic companies is fierce, and the Vietnamese freight and logistics market is dominated by foreign companies. Even though the foreign logistics firms account for less share of transportation volume, these take 70%-80% of the revenue of the logistics market. This highly fragmented nature is also limiting the logistics potential of Vietnam up to some extent.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Please note: This publisher does offer titles that are created upon receipt of order. If you are purchasing a PDF Email Delivery option above, the report will take approximately 2 business days to prepare and deliver.