Growth in Retail and E-commerce Industry, Huge Import & Exports and Free Trade Agreements with other nations were the key factors driving the growth in Indonesia Logistics Market.
In 2016, the total retail Market in Indonesia was accounted to be five times the size of Singapore. Indonesia is projected to grow significantly in future with surge in brands and companies considering e-commerce expansion. The expanding retail industry in the country has majorly attributed to the growth in the market size of the Logistics industry in Indonesia with rise in demand of freight forwarding, warehousing and express logistics. The increase in the retail stores, supermarkets and hypermarkets in the country has triggered the demand for logistics and warehousing space. The e-commerce industry has been increasing in Indonesia in past few years and this trend is expected to continue in future. This has led to high demand of the logistics services impacting the logistics industry in a positive manner.
The import and export of the country lead to the expansion of the logistics industry by increasing demand of freight forwarding and warehousing for the products to be traded.
The top export destination of Indonesia include the US, China, Japan, Singapore and India and the top import destinations are China, Singapore, Japan, Indonesia and Thailand. The increase in the values of imports and exports has made a positive impact on the freight market owing to the rising demand of logistic services for transporting exported and imported products. Major products which are exported from Indonesia are coal briquettes, palm oil, petroleum gas, crude petroleum and rubber whereas top imports include refined petroleum, broadcasting equipment, vehicle parts, crude petroleum and telephones. The top import destinations include China, India, Singapore, Japan, Thailand, US, Australia, Malaysia, Korea, Vietnam and others. Increase in trade with free trade agreements has led to requirement of logistics services making a positive impact on the market. The market is expected to grow significantly as a result of the Indonesian Government’s ASEAN Free Trade Area (AFTA) agreement, which will allow free import and export activity in the market.
The report titled “Indonesia Logistics and Warehousing Market by Sector (Freight Forwarding, Warehousing, VAS), by Domestic and International Services – Outlook to 2021” by Ken Research suggested a growth at a noteworthy CAGR of 7.9% in revenue in Indonesia Logistics Market in next 5 years till 2021. Freight Forwarding is expected to be the fastest growing segment in future with an expected CAGR of 9.2% from 2016-2021.
For more information on the research report, refer to below link:
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Ankur Gupta, Head Marketing & Communications