International Trade Tips: Navigating Asia’s booming e-commerce logistics landscape

The rise of E-commerce has transformed how both B2C and B2B companies operate and disrupted traditional business models.

For businesses involved in E-commerce, logistics, and supply chain are the most strategic aspects of their operations. In today's article, we explore the impact of e-commerce on your logistics operations in Asia and lay out the best practices for managing your logistics operations in the region.

Asia: the region where e-commerce spreads its wings the widest

Following the Covid-19 pandemic, consumers' and businesses' habit of relying on e-commerce to acquire goods has become more engrained in daily practices.

Given the role played by Asia in global manufacturing, it is no wonder that this rise would significantly impact this region's logistics sector.

According to "Asia: The highway of value for global logistics," published by McKinsey, Asia is set to account for 57% of the global e-commerce logistics market growth between 2020 and 2025. They note that "this may make Asia the single-most-important region for global trade and logistics activities going forward."

Furthermore, if e-commerce rises worldwide, it does so even more in Asia. While China already ranks as the most penetrated e-commerce market globally, with the digital economy accounting for more than 38% of its GDP in 2020, other Asian countries are not far behind. In particular, South-East Asia is experiencing a surge in e-commerce, boosted by massive growth in the digital payments sector, the rise of social commerce (the usage of social media and other online media to sell or buy products or services), and the maturing of e-commerce live streaming.

What to pay attention to if your e-commerce business operates in Asia

The rise of E-commerce has led to an increase in demand for transportation services and adapted warehousing facilities in Asia.

To answer this demand, resorting to multiple transportation modes has become vital to optimize operations and reduce costs. For example, a company might resort to a combination of air, sea, and land transportation to move goods from one location to another instead of relying on only one mode of transportation.

In addition, E-commerce has led to an increase in demand for adapted warehousing space. Indeed, the latter needs to answer the prerequisites specific to customers' e-commerce activity and region of operation. Depending on your operations, you might want to ensure you can rely on strategically located facilities or that they offer warehouse management and added value serv

It is important to note that the Asian logistics infrastructure is not uniformly developed across the region. On the one hand, East Asian countries such as China can rely on robust infrastructure and networks and established providers to support the rise of e-commerce. On the other hand, several ASEAN countries' infrastructure and logistics services are yet to mature, despite rapidly developing and attracting investors

You might thus want to adopt agile supply chain practices to respond quickly to customer demand and market conditions.

Hence, we can measure the importance for businesses whose manufacturing operations or retail market happen in the region to rely on trusted logistics partners with solid expertise in freight forwarding from, to, and within Asia, a reliable network, and adapted facilities.

For the past 15 years, ASI Logistics has built a solid presence and expertise in the Asian region. With offices in 6 strategic locations, well-established partnerships, and worldwide network, we enable our customers to benefit from worldwide, flexible logistics and freight forwarding services, tailored to fit their needs.

Our goal

Provide businesses with seamless and optimized logistics and freight forwarding operations from, to, and within Asia.

 

ASI Logistics' core values

ūüĎČCustomer CentricityūüĎą

ūüĎČSustainabilityūüĎą

ūüĎČPeople DevelopmentūüĎą

Supply Chain shift from China to South East Asia

Production shift toward S.-E. Asia: What does it mean for China?

Supply Chain shift from China to South East Asia

Over the past decade, more and more manufacturing operations have been switching away from China and toward South East Asian countries such as Vietnam.

This phenomenon is rooted in an increase in Chinese labor costs, the rising importance of the South East Asian market, and China's new economic orientation centered on higher value-added products and the service sector.

These past weeks, the recent adjustments of the country's zero covid policy have sparked new series of comments on this trend, as some wonder what will the impact of this policy shift on production and logistics be.

Is China's importance in the global supply chain lowering for good?

Not quite! While China's role is definitely going to evolve, its prominence in the global supply chain is unlikely to wane.

Indeed, while some labor-intensive industries and electronic products manufacturers have already started to relocate to South East Asian countries, Vietnam in particular, China remains its biggest source of import, especially when it comes to raw materials and core parts.

Analysts thus note that the two countries' value chains will further intertwine in the future, fostering renewed cross-border exchanges between the two countries.

Furthermore, over the past decades, China has developed a robust and well-connected transportation network in terms of land, sea, or air routes.

As such, whether in terms of import or export, China can rely on its logistic web to ensure its centrality in global trade. As noted by Xiaomi's spokesperson, "currently, no overseas country can replace China's supply chain clusters." Indeed, China has become a central nod to logistics operations not only in the Asian region, but worldwide.

Finally, following the shift in China's zero-covid policy, analysts note that the logistics and business relations between South East Asian countries and China will only become smoother in the future. Indeed, as cross-border movements and quarantine policies are easing, international trade in the region will gradually recover its pre-pandemic state.

How to ensure smooth supply chain operations in the region?

As manufacturing operations increasingly shift toward South East Asia, finding a logistic partner with expertise and presence in your key supply chain locations is essential.

ASI Logistics Cambodia

Thanks to its eight offices, including six conveniently located on China's east coast logistic hubs (Shanghai, Nanjing, Xiamen, Shenzhen, Ningbo, and Hong Kong), and its two branches in Ho Chi Minh City, Vietnam, and Phnom Penh, Cambodia, ASI Logistics accompanies you at every step of your product's journey.

ASI Logistics teams wish you a happy new year 2023!

Sources:

Chinese smartphone maker Xiaomi starts production in Vietnam to boost delivery efficiency. Global Times. (n.d.). Retrieved December 30, 2022, from https://www.globaltimes.cn/page/202207/1269827.shtml

Explainer: How no covid-zero in China could impact Vietnam. Vietnam Briefing News. (2022, December 12). Retrieved December 30, 2022, from https://www.vietnam-briefing.com/news/what-no-covid-zero-in-china-could-mean-for-vietnam.html/