The Vietnam Warehouse Market is likely to reach $86.7 billion by 2022 thanks to industrial expansion, e-commerce development, and continued investment.
Vietnam Warehousing Market
The Asia-Pacific warehousing service sector is exploding, with rapid growth in ASEAN countries and the influence of major economies such as China and India. In addition, the government’s influential support for logistics in the region is also a factor driving the industry’s growth.
China has recovered from the COVID-19 epidemic faster than any other country and as a result, this market is witnessing the evolution of the logistics industry, especially logistics for e-commerce.
To date, they transported most goods to the United States and Europe via the East-West trade routes. However, the trend in recent years has been the emergence of intra-Asian trade.
China, Japan, and South Korea now have modern, large-scale container ports in other Asia-Pacific countries that are investing billions of dollars to upgrade logistics infrastructure to meet demand.
As for the cold chain market (including cold storage and transportation), the Americas region will have the largest market share in the period 2020-2025. Vietnam’s warehouse sector can escalate thanks to the following reasons:
- There is good connectivity between the urban areas where most of the transportation comes from tier 2 and tertiary cities.
- Modern technologies such as enterprise resource planning, electronic data exchange, accounting, and customs software, GPS, barcode systems, radio frequency identification (RFID), traceability systems, robots, and drones are the technologies that are expected to help improve logistics services soon.
- The macro-economy will also support industry growth with the FTAs to promote trade relations between Vietnam and other Asian countries.
Foreign investment is estimated to escalate domestically. There are numerous logistics companies in ASEAN countries making a plan to invest in Vietnam in recent years.
Current Development of Vietnam Warehousing Industry
Currently, warehousing activities in Vietnam and the world are having many recent developments, but by the beginning of 2020, the COVID-19 outbreak has brought about many undesirable consequences. It directly affects the economy, and trade, especially in transport, warehouse, import, export, and trade of goods.
Therefore, individuals, organizations, and enterprises involved need to learn about Vietnam’s Warehouse Market to identify the direction to overcome and develop in the future. By 2020, the COVID-19 epidemic will seriously affect logistics operations in the world, although governments strive to maintain the supply chain of goods and give special priority to the circulation of goods.
Due to disease control measures and many workers in this field having to stay at home, the entire operation is paralyzed.
While in some places, warehousing operations are delayed because of diseases, some other segments such as warehousing for e-commerce have become overwhelmed because the number of shoppers and home delivery orders has skyrocketed.
Faced with the above situation, without good preparation, warehousing service businesses and customers will have many difficulties adapting to the new situation.
In the second half of 2020, the recovery of international trade flows was mainly driven by the global warehouse market following the epidemic. The post-COVID-19 trade facilitation and economic stimulus policies implemented by the Government are also assisting in market expansion.
In the complicated COVID-19, the major drivers of this market in the second half of 2020 are the significant efforts from both Governments, international organizations, and businesses to help stabilize.
In contrast, the market constraint factors are the lack of labor, the slumping demand, and the lack of effective anti-epidemic tools in the logistics process.
Vietnam Warehousing Market: Development Trends
Because of the COVID-19 epidemic, World Trade is affected, and at risk of an unexpected disruption, natural disasters, and trade tensions between major economies will directly affect the global logistics trends in the coming time.
Along with that are other major effects that could come from Brexit, the role of the WTO in global trade, the presidential election of the United States, or how to collect taxes on digital products and services. And we summarize warehouse trends over time as follows.
E-commerce flourished in increasing online purchases because COVID-19 was also a notable factor in helping the thriving e-commerce market. Consumers’ buying behavior and expectations change with higher demands for fast foods, free shipping at short rates, competitive prices, and convenient logistics.
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The rigorous delivery schedules challenge traditional logistics and supply chain models. It forces the companies to adjust their strategies to offer low-cost on-demand delivery.
The market share of e-commerce in the retail market is increasing. Innovative, customized online solutions to meet the specific requirements of customers will form the segment of high-end logistics services.
Challenges from the COVID-19 epidemic are promoting automation in the logistics sector (from transportation, port services, warehousing, and transportation) and will become a major trend soon. Actors throughout the value chain will prioritize improving operational efficiency by investing in technology.
The warehouse industry will transform significantly with automation to accommodate the rapid growth of cross-border e-commerce and the growing need for integrated supply chain solutions.
To support enterprises in the innovation industry to catch up with the general trend, the market for developing and applying warehouse software will be one of the bright spots of the global Logistics sector in the coming time.
The trend of green logistics continues to be an important highlight. Natural disasters and epidemics in recent years and especially in 2020 are not only an alarm bell but also an affirmation for the world to be more determined in environmental protection and sustainable development.
As one of the major polluting sectors, warehouses will be stricter than regulations on environmental protection and occupational safety in the coming time.
With the above trends, to make the most of every opportunity, warehouse service providers should focus more on fast-growing segments such as multimodal transport, e-commerce, and cold chain logistics.
Finally, cooperating more closely to ensure the goals of greening according to international regulations and commitments and for its sustainable development.
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