Logistics barriers impede growth of Asia Pacific’s e-commerce market, says new report

TI125April 23, 2013 – Asia Pacific represents the world’s fastest growing e-commerce market and has the potential to become the largest market for e-commerce sales in the next few years. Although this development led to a 33% expansion of the region’s e-commerce logistics market in 2012, Ti’s new report, Asia Pacific e-commerce Logistics 2013, warns that the sharp growth of the market has outstripped the region’s logistics capabilities.

Cathy Roberson, Ti’s Senior Analyst and lead author of the report, observed: “This is a region that has long been dependent on exports, with infrastructure developed to support this type of demand. The dramatic rise in domestic e-commerce sales has put a strain on infrastructure which is now proving to be a hindrance to market growth; thus creating considerable challenges for governments, retailers and logistics providers alike to overcome. However,  projects are underway to establish improved road and rail networks, better delivery service options and to expand warehousing and distribution centres. It remains to be seen if these developments can keep pace with the growth of e-commerce.”

According to the report, one of the main concerns is the need for modern warehousing. In China and India, for example, warehouses have historically served merely as storage facilities. The increase in e-commerce has resulted in demand for not only more warehouses, but also for facilities that are automated and integrated into retailers’ websites and store-fronts along with capabilities such as pick and pack. In addition, Ti’s report indicates that these facilities need to be located in more convenient locations as many consumers expect same-day or next-day delivery.

Another key issue outlined in the report is the limited access international logistics providers are permitted in domestic markets, if any access at all; for example UPS and FedEx were only granted limited licences to operate in China in 2012. Domestic providers do not necessarily have the capital to invest in major network overhauls and new start-ups are entering the market to fill gaps in the e-commerce supply chain. This has led to a high level of fragmentation and disjointed service capabilities. Furthermore, retailers have taken it upon themselves to develop their own logistics networks to overcome the shortfall in suitable domestic transport solutions. For example, Alibaba, Flipkart and Rakuten have all incorporated logistics as part of their individual corporate strategies.

Governments across Asia have been encouraging e-commerce as a platform for export growth, but they must now focus on developing domestic infrastructure to enable postal and logistics providers to enhance their service offerings and allow the region to continue its e-commerce growth spurt.

Asia Pacific e-commerce Logistics 2013 is third instalment in Ti’s global e-commerce Logistics series, complementing reports on the North American and European e-commerce Logistics markets.

About Asia Pacific e-commerce Logistics 2013

Ti’s new report Asia Pacific e-commerce Logistics 2013 provides unique analysis of the latest trends in the region’s e-commerce market; identifying the key factors that have attributed to its rapid growth and also the obstacles that may stand in the way of this trend continuing. The report also provides overviews of major retailers’ supply chains as well as profiles of the key logistics providers and postal services providing e-commerce solutions in Asia Pacific.

For more information, contact Cathy Roberson – lead author of the report and a Senior Analyst at Ti: croberson@transportintelligence.com. Cathy was supported on the project by researchers based in Asia as well as Ti’s head office in the UK.

About Transport Intelligence

Transport Intelligence (Ti) is one of the world’s leading providers of expert research and analysis dedicated to the global logistics industry. Utilising the expertise of professionals with many years experience in the mail, express and logistics industry, Ti has developed a range of market leading web-based products, reports, profiles and services used by all the world’s leading logistics suppliers, consultancies and banks as well as many users of logistics services.


SOURCE: Submitted by Transport Intelligence

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