Logistics is a crucial component of the Vietnamese e-commerce market to succeed and reach its full potential. Many foreign logistics providers and e-commerce operators are making efforts not to miss an opportunity to offer e-logistics and meet the rapidly growing demand.

The heightened emphasis on supply chain efficiency and effectiveness over the past 12 months in a bid to deliver goods with speed and agility for consumers has, and will continue to have, positive spillover effects on the industrial property market.

Stephen Wyatt, Country Head of JLL Vietnam comments: ‘With considerable growth in smartphone penetration in major cities, the e-commerce market will grow significantly as the shopping trend via smartphones keeps increasing every year, resulting in the resonant expansion of this market and more pressure on the logistics industry. Many e-Commerce firms are picking up the pace to keep up with the demand from customers.’

Wyatt told WILLIAMS MEDIA “We are seeing an increasing number of companies looking to relocate out of China due to higher labour costs and a challenging business environment. Vietnam is making a  big push to establish itself as the next manufacturing hub for South East Asia.”

A “prime” example of fulfilling this customer value proposition is Amazon.

This year’s Amazon Prime Day was one of the largest global shopping events in Amazon history – taking place across 17 countries with more than 100 million products purchased. That is a lot of physical goods circulating within warehouses and being transported across local, domestic and international distribution networks.

Major e-commerce and logistic players have been on the move to secure logistics space to efficiently fulfil orders – encompassing orders domestically received and/or orders that require overseas export distribution.  This has spurred a renewed appetite for pure industrial space in inner ring locations – optimal for the last leg of delivery.

Vietnam FDI and GDP per year

Click the image to expand. Source JLL

Sydney, being the most densely populated city in Australia and having the most constrained supply of industrial land, has recorded the strongest rate of annual take-up of industrial space within the inner sub-markets.  Between 2013 and 2017, industrial take-up within Sydney’s inner locations by transport, logistics and e-commerce sectors has recorded a five-fold increase.

There is no doubt that major e-commerce players will improve their offerings and further develop and expand their logistics and supply chain network in global. This, along with the projected growth in the e-commerce sector, will ultimately mean an increasing volume of physical goods circulating – and industrial space is at the forefront in capturing the positive spillovers from this expansion.

For more information or to discuss the Vietnamese property market and how logistics are shaping future investment email Stephen Wyatt, Country Head of JLL Vietnam via the contact details below. 

Source: JLL

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