How Vietnam Express Logistics Market
is positioned?
Growing
commercialization and busier lifestyles of people has led to the requirement of
faster delivery. This gave the logistics industry an opportunity to launch a
new service vertical named express logistics which was a faster way of delivery
compared to the normal delivery. The express delivery services industry
comprises of firms that provide expedited movement of document, parcels and
other goods. These firms maintain control over the shipments throughout the
delivery process and often use technology to monitor the location of each item.
As the air transport develops, the express services can reach longer distances
and fulfill the time-sensitive delivery.
The
Express
Logistics Market in Vietnam was evaluated at USD ~ million in 2011
which witnessed an increase to USD ~ million in 2012, thus displaying a growth
rate of ~% in the market. Air express was the most popular means of express
delivery as compared to ground express delivery. The trend of shopping online
for perishable items such as food products including fruits and vegetables,
meat, fish and others has been rising. Changing consumer shopping habits
coupled with rising usage of E-commerce has given a rise to express delivery
services in the country. Vietnam express logistics market was observed to
generate revenues worth USD ~ million in the year 2017, thus growing at a six
year CAGR of ~% in the review period 2011-2017.
Vietnam Express Logistics Market
Segmentation
By International and Domestic Express
The
domestic express segment dominated Vietnam express logistics market with a
massive revenue share of ~% in the year 2017. Domestic express delivery
companies operating in Vietnam were witnessed to start investing in modern
technology in order to meet the increasing demand in the delivery of goods
through E-commerce. On the other hand, international express services in
Vietnam express logistics market captured the remaining ~% revenue share in the
year 2017 majorly owing to development in transportation for sending goods to
international locations.
By B2B, B2C and C2C
The
B2B segment followed with a revenue share of ~% in Vietnam express logistics
market in the year 2017. B2B includes the delivery of trade samples, contracts,
and other time sensitive deliveries transported through a scheduled network
with door-to-door track-and-trace of individual items /consignments. The B2C
and C2C segments followed with revenue shares worth ~% and ~% respectively in
2017.
By Air and Ground Express
Aviation
is one of the top priority sectors for development by the government of Vietnam
as it is critical to the country’s economic growth. Air express logistics
services dominated Vietnam express logistics market with a revenue share of ~%
for international operations and ~% for domestic operations in the year 2017
owing to the country’s developing aviation sector. On the other hand, ground
express logistics in Vietnam express logistics market captured the remaining
revenue share worth ~% for international operations owing to lower growth of
traffic in terms of tonnes per km and ~% for domestic operations in the year
2017.
Comparative landscape in Vietnam
Express Logistics Market
The
express logistics industry in Vietnam was witnessed to be highly concentrated
with the presence of major players in both domestic as well as internal express
segments. Express logistics has gained popularity in Vietnam majorly due to
shift in consumer preferences; rise in E-commerce owing to increasing internet
and smartphone penetration in the country; and companies offering faster
options of delivery. In accordance with the Vietnam E-commerce association,
speedy development of online trading activities within the country has led to
express delivery firms in the domestic market to improve their fees and speed
of the delivery, thereby increasing competitiveness in the market. Major
domestic players include Viettel Post, GHN, VNPost and others. On the other
hand, Vietnam’s entry into World Trade Organization (WTO) has opened entry of
several foreign express delivery firms including DHL from Germany, TNT from
Netherlands, FedEx and UPS from US. Additionally, foreign tie-ups with
Vietnamese companies were also witnessed to increase in the country.
Vietnam Express Logistics Market
Future Outlook and Projections
Over
the forecasted period, Vietnam express logistics market is expected to drive
demand for express mail services majorly from leading growth sectors such as
IT, pharmaceuticals, electronics and financial & business services in the
country. The market is estimated to generate revenues worth USD ~ million by
the year ending 2018. With same-day delivery, orders are delivered within a few
hours after purchasing them, or in a chosen time window on the same day, thus
driving the demand for express delivery services in Vietnam. The express
logistics industry is expected to respond well towards growth in international
trade by investing in new delivery routes and services to ensure that they can
meet the growing demand for rapid, guaranteed international delivery. Vietnam
express logistics market is estimated to reach revenues worth USD ~ million by
the year ending 2022, thus growing at a CAGR of ~% in the forecast period
2018-2022.
How Vietnam E-Commerce Logistics
Market is positioned?
In
accordance with Vietnam E-Commerce Association, Vietnam is the 4th country in
terms of e-commerce development within Asia-Pacific region and is estimated to
reach a market size of USD ~ billion in the upcoming five years. Vietnam’s
E-commerce market majorly belongs to international giants such as Amazon and
Alibaba whereas; small players operating within this industry have more than ~
online sales sites and more than ~ active fan pages.
Growing
E-commerce activities has led to high frequency of large scale deliveries
across provinces, therefore giving birth to logistics services specific for
e-commerce activities in Vietnam. E-commerce in Vietnam is further anticipated
to grow at a good pace owing to the widespread of broadband internet and
technology services. Additionally, non-cash payment technologies coupled with
increasing trend of cross-border sales have created a positive impact the
Vietnam’s E-commerce industry.
Vietnam
E-commerce logistics market generated revenues worth USD ~ million in the year
2015 owing to the country’s increasing access to internet and smart phones
coupled with the emerging trend of online shopping. The market is primarily
dominated by third party logistics providers such as GHN, Viettel Post, VN Post
and DHL ecommerce; followed by E-commerce merchants such as Lazada, Shopee,
Tiki and others. The gradual shift in the preference of customers from physical
shopping (store based) to online shopping has exponentially increased the
number of online orders. In accordance with Vietnam E-Commerce Association,
Vietnam is the 4th country in terms of e-commerce development within
Asia-Pacific region and is estimated to reach a market size of USD ~ billion in
the upcoming five years. Surge in cross-border online trading activities is one
of the major driving forces affecting the Vietnamese E-commerce industry.
Vietnam E-Commerce Logistics Market
Segmentation
By Channel
3PL
companies in Vietnam E-commerce logistics market have dominated E-commerce
logistics market with the share of ~% in terms of number of orders received
during 2017. Some of the major 3PL companies include VN Post, Viettel Post, GHN
and others which provide end to end services i.e. from securing inventory in a
warehouse to transporting goods from one place to another. Whereas, E-commerce
merchants via their in-house logistics team captured the remaining market share
of ~% in terms of number of orders in the year 2017. Major E-commerce companies
in Vietnam include Lazada Vietnam, Adayroi and Tiki which have their own well
established distribution channel in the country.
By Speed of Delivery
The
2 day delivery, commonly known as standard delivery segment was observed to be
chosen as the most preferred shipping choice for Vietnamese digital buyers
owing to the rise in availability for free shipping among many e-retailers in
the country. The segment dominated by capturing a market share of ~% in terms
of number of orders, thus evaluated at ~ million in the year 2017. It was
followed by the 1 day delivery segment with a market share of ~% in terms of
number of orders, thus evaluated at ~ million in 2017. Growing expectations of
consumers towards fast shipping from e-retailers has led to rise of same-day
delivery option in Vietnam. The segment captured a market share of ~%, thus
evaluated at ~ million orders in Vietnam E-commerce logistics market in the
year 2017. Delivery within 2 hours and
delivery beyond 2 days captured the remaining revenue shares of ~% and ~%
respectively in terms of number of orders in the year 2017.
By Payment Method
The
Cash on Delivery (COD) segment established itself as market leader in Vietnam
E-commerce logistics market with a massive revenue share of ~% in the year
2017. Cash on Delivery (COD) remains the dominant means of payment method
accepted by merchants in the country owing to low consumer confidence in online
payments and limited card penetration. Other payment modes such as bank
transfers, payment cards; debit / credit cards, E-wallets and scratch cards
collectively captured the the remaining share ~% in Vietnam E-commerce
logistics market in the year 2017.
By Area of Delivery
The
intercity segment within Vietnam E-commerce logistics market established itself
as market leader with a massive market share of ~% in terms of number of
orders, thus evaluated at ~ million orders in the year 2017.
Intercity
delivery majorly happens with ground shipping where mini-trucks are preferred
to transport multiple deliveries of orders of multiple customers for the same
route taken. The segment dominates owing to the rising vehicle load capacity.
The
remaining ~% revenue share was captured by the intracity segment in Vietnam
E-commerce logistics market in 2017.
Comparative Landscape in Vietnam
E-Commerce Logistics Market
The
E-commerce logistics market in Vietnam was observed to highly concentrate with
the presence of major players such as GHN, VNPost and Viettel Post covering
around ~% of the market share in the year 2017. These logistics companies in
Vietnam were witnessed to compete on the basis of shipping points, coverage
area, delivery boys, prices, payment collection methods and associations with
E-commerce merchants. Other E-commerce logistics in Vietnam includes DHL
Vietnam, Saigon Post and Shipchung.
Since
the E-commerce business environment has become more dynamic and competitive, the
companies tend to demand better logistics services which are flexible and cost
effective in nature.
Vietnam E-Commerce Logistics Market
Future Outlook and Projections
Over
the forecast period, Vietnam E-commerce logistics market is expected to drive
demand from rising E-commerce spending especially by a young, smartphone
addicted and incredibly internet-savvy millennial group which has prompted
E-commerce platforms in Vietnam to alter strategies to cater to the younger
generation. Fulfillment of service order and electronic logistics play a vital
role in expansion of businesses, specifically for E-commerce logistics
providers. Value added services such as door delivery, real time tracking and
others have given a competitive advantage to logistics players to build long
lasting relationship with their customers. The sector is expected to escalate
its way in the urban cities where a huge share of traffic is coming from the tier
2 and tier 3 cities as well. Along with the expansion of logistic carriers’
network, now a shipment can be delivered across a wider geography including
other rural hubs. Vietnam E-commerce logistics market is expected to generate
revenues worth USD ~ million in 2018 to USD ~ million by the year ending 2022,
thus growing at a CAGR of ~% in the forecast period 2018-2022.
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