Courier services grow from e-commerce boom in Southeast Asia

Courier operators are ramping up their air freight and warehousing capacity to handle Southeast Asia's exploding e-commerce volumes.

Courier services grow from e-commerce boom in Southeast Asia (Image: Phaata.com)

In recent years, Single's Day has become a major showcase event in China and now Southeast Asia, with Alibaba creators hosting epic events, complete with numbers Statistics on sales by the minute. Last year, this day generated $74 billion in total value of e-commerce goods.

However, Alibaba is said to have staged a cooling off event this year, after Beijing stepped up regulatory scrutiny of the country's tech giants, including penalizing Jack Ma's company with a $2.8 billion fine in April for monopolistic behavior, according to Reuters.

However, this week, logistics business Cainiao announced plans to expand its warehouse network across Southeast Asia, following the surge in demand for cross-border e-commerce, which is also a channel for customers in Singles' Day festival.

Cainiao said it plans to set up a network of smart warehouses in Vietnam, Indonesia, Malaysia and Singapore, known as cHubs, with an area of nearly 2.5 million square meters.

Eric Xu, general manager of Cainiao Smart Hub, added: “The region’s sweeping urbanisation and industrialisation, rapid growth in e-commerce and the rising expectations of a direct-to-consumer model puts cHubs in a prime position to establish an innovative supply chain infrastructure.”

Cainiao said the pandemic has put many companies "into upheaval" and is fueled by an online spending boom in Southeast Asia, noting that the market has expanded by nearly 600 percent since 2016 to 2020.

Cainiao added: “These cHubs enable e-commerce merchants and local businesses in South-east Asia to be at the forefront, providing end-to-end and cost-effective logistics services without traditional middle distribution layers.”

Indeed, Singapore-based J&T Express has also expanded its warehouse network following the growing demand for e-commerce shipping. J&T Express has opened two new facilities in Singapore, an 82,000 square meter fulfillment center in Penjuru and a freight hub at Changi Airport.

These facilities have since also acted as strategic transit hubs within the J&T network, which includes Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia and China.

J&T said it has also rolled out a network of parcel drop-offs across Singapore to assist sellers during the Singles' Day festival.

Meanwhile, DHL Express has increased its air freight capacity, through partner airlines, to meet growing demand in the Asia region.

The airline said a new freighter, operated by K-Mile Asia, flies six times a week between Hong Kong and Bangkok, adding more than 200 tons of weekly capacity. And Air Hong Kong added a sixth flight to two routes between Beijing, Hong Kong and the Philippines, adding more than 1,200 tonnes of weekly capacity.

Ken Lee, Managing Director of DHL Express Asia Pacific, said: “As economies recover from the global pandemic and income levels rise, we expect the intra-Asia market to grow substantially, with a corresponding increase in demand for express logistics services propelled by a thriving e-commerce sector.”

See more: