The ecommerce boom in Southeast Asia has resulted in logistics operators expanding their networks by boosting air cargo and warehousing capacity in the region.
Take the recently held 11/11 Single’s Day shopping festival hosted by Alibaba as an example. Despite toning down due to an increased regulatory scrutiny from Beijing, Alibaba raked in a record US$84 billion in orders, up 14% from the year prior. Bulk of these orders came from Southeast Asian consumers.
Cainiao, which ironically is Alibaba Group’s logistics arm, announced early this week plans to establish and expand a smart-warehouse network in Malaysia, Indonesia, Singapore, and Vietnam. The said smart-warehouse network which has a vast footprint close to 2.5 million sq meters, will be known as cHubs.
The move to expand its network in Southeast Asia makes total sense as the ecommerce market in the region has expanded by almost 600% between 2016 and 2020. According to Statista, the ecommerce market in Southeast Asia will be worth US$309 billion by the year 2025.
Another key player in the region that has expanded its warehousing network due to the growing demand for ecommerce shipments is J&T Express. The logistics company which started its business in the Indonesian market back in 2015, recently opened two new facilities in Singapore; a freight hub at Changi Airport and an 82,000 sq ft fulfilment center in Penjuru.
The freight hub at Changi Airport is particularly interesting as it serves as a strategic hub for transshipment within the J&T network which consist of Malaysia, Indonesia, Philippines, China, Cambodia, Vietnam and Thailand.
Meanwhile, logistics giant DHL Express announced earlier this week that it has increased its air cargo capacity in the region. Its partner airlines, operated by K-Mile Asia added over 200 tons of weekly capacity, and is flying frequently between Hong Kong and Bangkok.
In addition, Air Hong Kong which is also a partner of DHL Express, added 1,200 tons of weekly capacity, rotating between the routes of Hong Kong, Beijing, and the Philippines.
Not to be left behind, Teleport, which is the logistics venture of AirAsia Digital, launched its first dedicated 737-800 freighter earlier this month. Based in Bangkok, Teleport will be able to reach key markets in Asia hence further expanding its air cargo network.
Other high profile deals and joint ventures in the region include Deutsche Bank acquisition of a US$53 million warehouse in Singapore and German logistics firm DB Schenker investment of S$163 million in its new warehouse at Singapore’s Airport Logistics Park.
In Indonesia, Alpha Investment Partners, which is an asset management arm of Keppel Corporation, entered into a joint venture with Manulife and Mega Manunggal Property to buy and manage high quality logistics properties with a war chest of US$200 million.
In October, Mapletree Logistics Trust announced that it will be spending US$765 million in acquiring logistics properties in Vietnam, Malaysia and China. Additionally, Logos, which is an Australian based logistics development firm, bought its first site in Vietnam earlier this year. The firm is investing a total of US$350 million as a part of its Logos Vietnam Logistics Venture.
