Infra, tech help drive logistics market

Increasing Internet connection has also opened local consumers to markets in other parts of the region, particularly bigger markets with more advanced product manufacturing capability.

Infrastructure development with the aid of government’s flagship program paired with technology advancement is seen to support the growing domestic logistics market in the face of the rapidly rising e-commerce industry.

Real estate consultancy firm Jones Lang LaSalle (JLL) said that ride-hailing, online media, online travel and e-commerce drive Southeast Asian countries such as the Philippines’ online economy. Such are seen to grow at a compounded annual rate of 20 percent by 2025.

“Industrial and logistics real estate has incredibly strong growth fundamentals across both a global and national scale. Infrastructure projects and technology will combine to drive rapid evolution of the logistics market in the Philippines,” JLL director for industrial and logistics Tom Over said.

According to a 2019 report by Google, Temasek and Bain & Company, 90 percent of the 360 million users in Southeast Asia connect to the internet via mobile phones, playing a major role in the region’s $100 billion internet economy which is still seen triple to $300 billion by 2025.

Countries such as Malaysia, Thailand, Singapore and the Philippines are especially seen to continue growing by 20 to 30 percent annually.

Ninja Van chief operating officer Vin Perez, meanwhile, said the online economy in the Philippines is being fueled by social media dynamics adding to the demand in e-commerce and logistics, such as social media influence and cross-border opportunities.

“On the average, Filipinos spend four hours a day on social media. And because of this behavior, social selling is becoming an important component of e-commerce.

Influencers, people who are followed a lot, start to promote products, and because of this we start to see a very different dynamic. As a company we don’t just talk to marketplaces, we start to talk to these social media influencers,” Perez said in a forum by JLL in Makati in 23 October.

Ninja Van, whose operations focus on e-commerce, has established 170 hubs in the country only three years after it started here in 2016. The logistics provider covers 100 percent of not just the Philippines, but Southeast Asia.

“That speaks to the volume that e-commerce offers. More and more we see now, some of the traditionally retail players want to get in; (they’re) starting to establish their online presence,” Perez said.

Increasing Internet connection has also opened local consumers to markets in other parts of the region, he said, particularly bigger markets with more advanced product manufacturing capability.

Still, Perez added that industrial spaces, along with internet speed and Filipinos’ preference for cash payment remain hurdles for growth. The lack of industrial spaces, he said, limits the amount of investment companies such as Ninja Van pour.