Needless to say, the supply chain in Southeast Asia was disrupted due to the surge in COVID-19. But it has become the basis for logistics leaders and companies to seek greater resilience and reconfigure their global supply chains.
Another trigger point was the US-China trade war that broke out 3 years ago. This allows companies to shift their supply chain to Southeast Asia. As China increased its tariffs, companies are slowly reassessing other options, and are beginning to explore Vietnam, Indonesia and Malaysia to diversify risks.
New startups are being established and the industry is moving on and will likely continue and improve.
J&T Express, an Indonesian courier company plans to go public in the US with an IPO that could raise over $1 billion. On the other hand, Lalamove, another local courier, raised $1.5 billion to sustain its growth and speed in competing inter-city freight routes.
One of the most significant developments in
terms of road transport is the adoption of the ASEAN Customs Transit System (ACTS). It is a computerized transit management Latest Mailing Database system that allows authorized carriers to transport goods across borders using a single document. This system also eliminates import duties and tax fees on goods entering and leaving the country.
Warehousing and distribution are also growing, thanks to initiatives taken by the government, such as Adapt and Grow , and Go Digital for SMEs, and the high demand for last mile logistics and improvements in transportation infrastructure.
Singapore, Vietnam and Thailand are some of the most competitive markets due to the large number of international players such as CEVA, Kerry Logistics and DHL.
In conclusion
The main takeaway from all of this is that all the fundamentals are in place for Southeast Asia to become the next major eCommerce hub. It has a strong economy, a rapidly growing literate population, and countries are rapidly adapting to technology.
Driven by factors such as the US-China trade war, rapidly growing market opportunities and government support, the Southeast Asian eCommerce industry is sure to surpass the global average.
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