Executive Briefings

Southeast Asian E-Commerce Market Zooms, But Region's Airfreight Capability Lags

Although a new study by Google and Singapore's sovereign wealth fund Temasek projects the Southeast Asian e-commerce market to reach $200bn by 2025, the region's air cargo capabilities remain underdeveloped, according to Cainiao, the logistics unit of Chinese e-commerce giant Alibaba.

Southeast Asian E-Commerce Market Zooms, But Region's Airfreight Capability Lags

The Temasek-Google report underscores just how important the market will become in the next decade, and increases pressure on both policy makers and airfreight companies to respond. Currently, the region is adding 3.8 million new internet users a month. The report raises a number of challenges to e-commerce over the next decade, and highlights inconsistent regional logistics as a major impediment. However, it also contends that, with between $40bn and $50bn in investment, Southeast Asia’s digital economy can make significant strides over the next decade and meet these projections. Most of the projected growth is the product of three important factors: about 70 percent of the population is under the age of 40, the region lacks big-box retail capacity and the middle class is growing rapidly.

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The Temasek-Google report underscores just how important the market will become in the next decade, and increases pressure on both policy makers and airfreight companies to respond. Currently, the region is adding 3.8 million new internet users a month. The report raises a number of challenges to e-commerce over the next decade, and highlights inconsistent regional logistics as a major impediment. However, it also contends that, with between $40bn and $50bn in investment, Southeast Asia’s digital economy can make significant strides over the next decade and meet these projections. Most of the projected growth is the product of three important factors: about 70 percent of the population is under the age of 40, the region lacks big-box retail capacity and the middle class is growing rapidly.

Read Full Article

Southeast Asian E-Commerce Market Zooms, But Region's Airfreight Capability Lags