News / E-commerce boom in South-east Asia drives expansion of express networks

Express operators are boosting warehousing and air cargo capacity to handle South-east Asia’s booming e-commerce volumes, despite today’s Singles’ Day shopping festival appearing “muted”.

In recent years, Singles’ Day has become a major showcase for China, and now South-east Asia, with creator Alibaba holding extravagant events, complete with minute-by-minute sales stats. Last year, the day generated $74bn in gross merchandise value.

However, Alibaba reportedly held a “toned down” event this year, following Beijing’s increased regulatory scrutiny of the country’s tech giants, which included slapping Jack Ma’s company with a $2.8bn fine in April for monopolistic behaviour, according to Reuters.

Nevertheless, this week logistics arm Cainiao announced plans to expand its warehousing network across South-east Asia, following surging cross-border e-commerce demand, for which the Singles’ Day festival also caters.

Cainiao said it planned to establish a smart warehouse network in Vietnam, Indonesia, Malaysia and Singapore, to be known as cHubs, with a footprint close to 2.5 million sq metres.

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 had sent many companies “into upheaval” and accelerated South-east Asia’s online spending boom, noting the market expanded by almost 600% between 2016 and 2020.

It 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 warehousing network following growing demand for e-commerce shipments. It has opened two new facilities in Singapore, an 82,000 sq ft fulfilment centre in Penjuru and a freight hub at Changi Airport.

The latter also serves as a strategic hub for transhipment within the J&T network, which includes Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia and China.

J&T said it had also launched a network of parcel drop-off points across Singapore to support sellers during the Singles’ Day festival.

Meanwhile, DHL Express has increased its air cargo capacity, via partner airlines, to cater for rising intra-Asia demand.

It said a new freighter, operated by K-Mile Asia, was flying six times a week between Hong Kong and Bangkok, adding over 200 tons of weekly capacity. And Air Hong Kong has added a sixth flight rotation to two routes between Beijing, Hong Kong and the Philippines, adding over 1,200 tons of weekly capacity.

Ken Lee, CEO 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.”