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What is the Asia Pacific market-size (TAM) for the Logistics and Last Mile Fufilment industry?
Greetings! Thank you for your request for information concerning the market-size for logistics and last mile fulfillment in the Asia Pacific (APAC) region. It is my pleasure to research this for you. The short version is that the market size for the logistics industry in APAC was $328.81 billion in 2017, growing at an average rate of 4%. Please continue below for a deep dive of my findings.
METHODOLOGY
In order to research this request, I began by searching for the market size for logistics in APAC as a whole. This information was found by correlating the global market share for APAC to the global market size. After this, I was able to narrow this further to distribution/last mile market. Finally, I sought information on top competitors in the region, disruptive startups, and key drivers of the industry.
LOGISTICS MARKET IN APAC
The most recent data shows that the 2015 global market size for logistics was $760 billion USD, of which, APAC represented 40%. By multiplying these values, we see that the total market size for logistics in APAC was $304 billion. With growth rates in the area estimated to be between 3.9% and 5.0%, we can estimate the 2017 market in this manner:
2016: $304 billion + 4% = $304 billion + $12.16 billion = $316.16 billion
2017: $316.16 billion +4% = $316.16 billion + $12.65 billion = $328.81 billion.
When examining the portion made up by last mile logistics, we see that the global last mile industry was worth $733.69 billion in 2014, with APAC representing 35.2% or $258.26 billion, growing at a rate of 5.2%. Of this $258.26 billion, warehouse and distribution accounts for 22%, or $56.8 billion. Applying the same math with growth rates as we did for the entire APAC logistics industry, we see the following values for warehousing and distribution:
2015: $56.8 billion + 5.2% = $59.76 billion
2016: $59.76 billion + 5.2% = $62.87 billion
2017: $62.87 billion = 5.2% = $66.14 billion
An exact value for the breakdown between warehousing and distribution was unable to be found; however, if we conservatively assume a 50/50 split, we can estimate that the last mile segment is worth about $33 billion in 2017.
Examining the market from an e-commerce standpoint, however, we come to some different conclusions. Data shows that in 2012, logistics for e-commerce in APAC was worth $83.11 billion, and projected to reach $175.24 billion in 2016. Given that this value comprises four areas of e-commerce, of which logistics is one, if we take 25% of the value, we see that last mile would hold approximately $43.81 billion of value.
Given the two values of $33 billion and $43.81 billion, we should most likely lean more towards the $33 billion as this is based on more recent data.
TOP COMPETITORS
Mordor Intelligence has compiled a report with great detail on the freight and logistics industry in APAC; however, much of the information is behind a paywall. The full report can be accessed here. Despite key figures not being publicly available, we can see in the executive summary a listing of key players in the region:
->Robinson
->Deutsche Post DHL
->FedEx Corp.
->Maersk Group
->Nippon Express
->UPS Supply Chain Solutions
->Walmart Group
PRNewswire states that consolidation has been driving the industry over the last twenty years, with companies "seeking fewer, larger providers that are able to manage complex supply chains on a global basis."
The growth rates for the top providers of logistics services have varied greatly over the 2010-2014 range, from -4.6% for Wincanton, to 26.9% for Yusen Logistics.
NOTABLE STARTUPS/DISRUPTORS
While consolidation to larger groups has been a key factor in the industry over the last several years, smaller groups are looking to disrupt the space. One such company, GoGoVan, has expressed its desire to be the "Uber of Delivery" for the Asian market. This Hong Kong based company was established in 2013, and now operates over 18,000 vans, claiming greater than 50% of the van driver market for last mile fulfillment. This service operates via an app, touting a response time of 10 to 15 seconds, versus a 20 to 30 minute wait via a traditional call center. Customers range from individuals to small businesses to larger enterprises. EasyVan has also established itself in the region as a competitor operating a similar business model.
Drivers for GoGoVan also describe benefits over traditional delivery services such as "less idling time," and higher wages.
FACTORS AFFECTING GROWTH
The rapid expansion of eCommerce in the region has had a profound impact on the logistics and last mile fulfillment industries. Growing at a CAGR of 19.9% between 2011 and 2016, the eCommerce industry in APAC was worth an estimated $708 billion in 2016, up from $238 billion in 2011. Leading nations in this spending (2015) are:
It is worth noting that while the CAGR for online spending for 2013-2018 in Austalia, Japan, and South Korea is 10%, China looks to grow at a rate of 18%, and India at a staggering 50%.
CONCLUSION
To wrap it up, the market size for logistics in APAC is projected to be worth $328.81 billion in 2017, and growing at a rate of approximately 4%. This value represents 40% of the global market, spurred by the rapid expansion of eCommerce.
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