PETALING JAYA: As traditional forwarding agents reach for a share in the booming e-commerce business, they are competing with rising technology-centric express logistics companies and start-ups to win the trust of e-commerce players across the region.
The Malaysian Investment Development Authority (Mida) has approved eight e-fulfilment projects as of March 2019, of which seven are locally owned. The interest of companies in emerging areas, such as cold chain logistics, last-mile delivery services and halal logistics, is growing, due to the high margins and rising demand.
CJ Century Logistics Holdings Bhd is an example of an industry player that has made the move. From being a forwarding agent in the 1970s, the group has since diversified into integrated logistics, oil logistics, procurement logistics as well as data management solutions. According to its annual report, expansion into courier services is its new core activity.
CJ Century has aggressively expanded its courier services network during 2018 to ride on the momentum of the booming e-commerce industry in Malaysia. This expansion is set to continue in 2019 and e-commerce will remain an important growth factor for CJ Century in the coming years.
The group plans to grow in tandem with the increasing scope and scale of the e-commerce trade to provide integrated cross-border logistics and supply chain solutions for a new era of strategic commercial partners.
“Looking ahead, e-commerce logistics is expected to play a more important part in the group’s business. Leveraging on our extensive ground network as well as the unwavering support of CJ Logistics to roll out their innovative logistics solutions and expertise in courier services, CJ Century is ready to ride on the rapid growth of e-commerce and drive faster growth for the logistics business,” CJ Century managing director Teow Choo Hing said in its 2018 annual report.
E-commerce in Malaysia is envisaged to achieve its projected annual e-commerce growth of 20% in 2020.
Top e-commerce platform Shopee achieved over a threefold increase in its gross merchandise value during Chinese New Year and Hari Raya this year, compared with the corresponding festive periods in 2018.
Shopee has also introduced its next-day delivery service in June which served to disrupt the logistics sector in Malaysia.
“We have no qualms that the second half of 2019 is going to be a vibrant season that is poised for strong growth with the 9.9, 10.10, 11.11 and 12.12 sales, not just for our industry but also the entire network of industries that support e-commerce including the banks, telcos and logistics providers,” said Shopee.
According to a recent survey by Parcel Perform and iPrice Group, 43% of consumers in Malaysia are unhappy with their e-commerce delivery experience, as Malaysia reports the longest transit time in the Southeast Asia region, with deliveries taking 5.8 days versus a regional average time of 3.3 days.
This reflects room for improvement in the logistics industry as players aim for a foothold in the thriving e-commerce business.