Three key logistical trends shaping ecommerce in Southeast Asia
Southeast Asia is one of the most unique and fastest-growing ecommerce markets in the world. Post-pandemic consumer behaviour has rapidly accelerated online transactions in the region, with an estimated 70 million more people shopping online since the pandemic began.
In 2022 ecommerce sales in Southeast Asia will total $89.67bn, an increase of $15.31bn over the last year and the largest growth percentage (20.6%) of any other geographical market. By next year, the region is expected to pass the $100bn mark.
This impressive growth will rightfully put the region on the radars of scaling brands all across the globe. One of the key considerations facing any business expanding into a new geographical market is how they can cope logistically. This question is particularly loaded in Southeast Asia, where last mile delivery does still remain a challenge.
To help shine a light on current logistics trends in Southeast Asia, Parcel Monitor shared with us their in-house data insights from the region, and key considerations for retailers as we look to 2023.
Image 1: Transit times and first-attempt success rate in Southeast Asia (Image Source: Parcel Monitor)
Malaysia leads the way in transit times
In the first quarter of 2022, Malaysia led the Southeast Asia region for transit time with an average of 1.37 days. These findings coincide with an improvement in Malaysia’s overall key performance indicators in comparison to the year prior.
This strong performance can likely be credited to several logistics companies enhancing their delivery services in the country. For example, Lalamove — one of Asia’s leading same-day delivery services -expanded its delivery coverage, added larger vehicles to its fleet, and introduced same-day long-haul delivery services to Johor and Penang.
Elsewhere in the region, Singapore and Indonesia recorded a slightly longer transit time of 1.46 days, while Thailand was the slowest at 2.68 days throughout the same period.
Brands and retailers visible in the Malaysia market can look to benefit from the enhanced logistics ecosystem as they move into the new year.
First-attempt delivery success rate dips in 2022
Indonesia had the highest first-attempt delivery success rate in Q1 at 96.8%, followed by Singapore (94.4%), Thailand (93.2%) and Malaysia (90.1%).
However, across all four countries, the rate of successful first-attempt deliveries was down throughout the period from Q1 2021 to Q2 2022. This decrease was likely caused by fewer people working from home during the day, and fewer people being at home generally as lockdown restrictions were lifted in each country.
This trend could continue into the start of 2023 as people head back to the office or adopt hybrid and flexible work arrangements.
Carriers shoulder most responsibility for delivery issues
According to Parcel Monitor’s latest data, the majority of issues encountered in the delivery chain in Southeast Asia come from the carriers’ end. These issues included delayed deliveries and shipments on hold.
Logistically, Southeast Asia can be difficult to navigate, placing a greater importance on customer support for brands selling in the region. When issues are encountered, it’s vital that businesses maintain regular communication with the customer, offering updates on a parcel’s status and flagging any potential delays.
Looking ahead to 2023, this focus on customer experience is still key. Whether brands choose to manage this aspect themselves or outsource to a partner, it’s a crucial factor that should be of high priority.
Succeeding in Southeast Asia
As an ecommerce market, Southeast Asia is understandably a hugely attractive prospect for brands.
It does, however, bring a number of unique challenges, and the fragmented nature of the ecommerce landscape can make logistics arrangements difficult, with different markets within the region presenting different hurdles.
When it comes to delivering a seamless customer experience, there are many interactions to consider along the customer purchasing journey. Brands and retailers that focus on delivering a premium delivery experience can stand out from others. By helping customers streamline the last mile, time is freed up to focus on value-added services such as branding and customer service.
An integration platform like ChannelEngine can help brands, retailers, and distributors relieve operational stress, granting access to logistics data partners like Parcel Monitor to ensure a smooth transition into Southeast Asia.
This article is part of a series where ChannelEngine and Parcel Monitor share insights into the SEA ecommerce landscape.
Parcel Monitor is an ecommerce logistics community for consumers and professionals. For more exclusive reports, insights, and interviews on the latest updates in ecommerce and logistics, follow Parcel Monitor on LinkedIn or join Parcel Monitor’s community as a member.
