As ecommerce booms, funding into logistics in Southeast Asia hits record high

Photo credit: Halfbisqued.

People are becoming more demanding. Now that they can buy almost anything with a few clicks or taps, they also expect it to appear on their doorstep instantly.

The ecommerce-focused logistics industry could be as lucrative as online shopping itself.

That’s the challenge ecommerce firms in Southeast Asia are facing. With a population of over 600 million, the region is poised to become one of the largest ecommerce markets in the world, next to China and India. Yet it suffers from inadequate infrastructure and a woefully inefficient logistics network. Shipping your gadget from an online merchant to your home could still take days and cost a small fortune.

With this in mind, a variety of startups have sprung up to tackle bottlenecks in logistics, believing that if they crack it, the industry can be as lucrative as ecommerce itself – maybe even more. And they’re not alone.

Investors also see Southeast Asia’s logistics market as the next gold rush. That’s made evident by the fact that 2015 saw more investments in regional logistics than ever before. The amount totaled US$28.16 million, according to the Tech in Asia database, up 110 percent from 2014. Look at how the scene grew over the past three years.

That growth in funding for logistics startups outpaced the overall tech funding landscape, which grew 43 percent to an all-time high of US$1.62 billion in 2015 from US$1.13 billion in 2014.

But logistics still has a lot of room to grow given that it accounted for only 1.74 percent of the total tech funding.

In terms of companies, aCommerce, a one-stop shop for online retail services, including cross-border management, warehousing, fulfilment, and last-mile delivery, leads the pack with US$20.2 million disclosed funding to date. Next are online grocery delivery service HappyFresh, inventory management software startup TradeGecko, last-mile delivery service Ninja Van, and Deliveree, a platform that matches transporters with customers.