ASEAN: Last-mile logistics poised for fresh demand

According to Nomura analyst Ahmad Usman, the rapid growth of e-commerce transactions in South East Asia will require more 3PL expertise. The report also notes that ASEAN’s B2C retail market is still at a “nascent stage” compared to Japan and China but has untapped e-commerce potential.

“While ASEAN’s post and parcel numbers are nowhere near the billions of postal mails and parcels handled in Japan and the United States, they suggest a similar story,” says Usman. “With surging internet and smartphone penetration and higher online spending, we foresee ASEAN’s parcel market size to see a compound annual growth rate of 23% by 2020.”

Furthermore, Nomura researchers estimate that both Vietnam and the Philippines will see the highest growth rates over the next five years within ASEAN.

As we’ve been covering in Logistics Management, most of the world’s leading couriers and 3PLs have been expanding in South East Asia in recent years in a bid to access the region’s fast-growing consumer markets. According to Nomura, global integrators will face strong competition from Asian companies already boasting a strong foothold in ASEAN, most notably SingPost, LBC Express, GD Express and Pos Malaysia.

According to Nomura reports, the revenue opportunity for courier players should double to $7.54 billion by 2020, from the current $3.69 billion in 2015—a 15% compound annual growth rate over 2015-2020.

Logistics analysts say escalating e-commerce demand in Asia also means growth of heavy freight movements—for example, parts for mobile phones trucked from Vietnam to China for assembly, then shipped out by air or truck, leading eventually to last-mile deliveries.