The Association of Southeast Asian Nations (ASEAN) region is expected to be the next destination for global participants, replacing China, due to its geographic proximity, large consumer base, and low cost attracting traders. Developing economies in the region such as Cambodia, Myanmar, Laos, and Vietnam (the CLMV countries of the Greater Mekong Subregion) are emerging as an attractive destination for investors.
The ASEAN Strategic Transport Plan, along with the national plans of the member countries, enhance the growth of cross-border logistics, enable seamless connectivity and create opportunities for effective trade facilitation to stakeholders. A significant shift in supply chain management is under way from insourcing to outsourcing due to socio-economic development, which leads to a demand-driven logistics model with the support of eCommerce in ASEAN. This is further assisted by rising urbanization and uberization trends in the region
Experts at Frost & Sullivan have identified top ten disruptive trends in ASEAN logistics market as the following:
- Urban logistics
- Rise of Blockchain
- Rise of ASEAN eCommerce
- Cross-border logistics
- Freight shit from Road to Rail
- National Logistics Master Plan
- Acceleration of Logistics Outsourcing
- Emerging Hotbeds
- Digital Disruption of Start-ups
To learn more about Frost & Sullivan’s research on ASEAN Logistics Market, visit https://bit.ly/2JS6pub.
More than half of ASEAN’s population is expected to be comprised of city dwellers by year 2025. As a result, this accelerates the need for urban logistics. Moreover, urban logistics in ASEAN will be further enhanced by the adoption of technology solutions such as eCommerce and app-based crowdsourced logistics platforms, which lead the supply chain activities from insourcing to outsourcing. Rising urbanization and uberization trends also boost the growth of start-up companies as part of the supply chain model in ASEAN.
Industry analysts at Frost & Sullivan four key trends in urbanization in ASEAN countries that are driving the region’s logistics model: mega cities, smart and sustainable cities, mega corridor, and mega region. It is predicted that mega cities in ASEAN will account for about 40% of the region’s total Gross Domestic Product (GDP) by 2025. Countries such as Singapore, Malaysia and Indonesia will be leading the region’s smart city development by 2025. As a result, supply chain models in ASEAN must be modified to address the needs with the support of the rising middle income group in ASEAN by 2025.
In conclusion, industry experts at Frost & Sullivan noted that the logistics industry in ASEAN is forecast to be more agile and anticipatory by 2025, allowing service providers to address the rising demand with cost- and time-effective solutions.
Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at email@example.com