Opinion | Southeast Asia is seeing a new kind of logistics surge as start-ups apply new technology to old problems

Venture capitalists in Southeast Asia seem to have a lot to say about the implications Grab and GoJek have for the logistics space. It’s true that these players are not to be ignored. After all, they have a vast ocean of on-demand drivers throughout the region and literally billions of dollars to spend on new initiatives (think Uber Freight).

However, it’s important to note that app-based names like Grab Delivery, GoBox, and Deliveree largely represent consumer use and last-mile transport. In terms of what blue-chip multinational enterprises like Unilever, L'Oréal, and Coca-Cola need for their daily B2B logistics and regional distribution, it’s a different game entirely. That game is on the verge of blowing up in emerging markets like Indonesia.

Southeast Asia’s e-commerce boom is an important part of the paradigm shift. Online retail will be a more than US$38 billion industry by the end of 2019, up from US$23 billion in 2018. Sales are expected to mushroom to more than US$150 billion by 2025 – that is US$50 billion more than predictions made over a year ago – on the back of stronger-than-anticipated growth, according to Google and Temasek.

Combine this trajectory with a newly-vibrant fintech sector that has all but made sure digital payments are no longer a barrier to entry for consumers, as well as governments making infrastructure promises worth hundreds of billions of dollars, and we can start to see the writing on the wall.

Southeast Asia’s third party logistics market accounted for US$36.4 billion in 2017 and is expected to grow at a compound annual growth rate of 5.5 per cent through 2025. This makes it a soon-to-be US$55.7 billion industry, according to Research and Markets.