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View all search resultsLogistics companies struggle to realize growth potential
The the logistics sector is estimated to grow 12 percent this year but t would be far below the growth of the e-commerce
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GrabExpress provides fast package deliveries across the city. Tokopedia recently partnered with Grab to help deliver its vendors’ products to customers more efficiently.
D
espite being a core factor of Indonesia’s flourishing e-commerce sector, logistic companies are still unable to meet the sharp growth of e-commerce businesses. As a result, online retailers still lack options for transporting their products, especially to outside Java.
According to the Indonesian Logistics Association (ALI), the logistics sector is estimated to grow 12 percent this year, above the average growth of most business sectors, but it would be far below the growth of the e-commerce sector, which according to Bank Indonesia (BI), could be between 100 percent and 150 percent a year.
ALI chairman Zaldy Ilham Masita said the e-commerce sector was not actually the biggest customer for logistics services as it made up only around 6 percent of the goods shipped by logistics companies.
“Consumers used to only browse e-commerce platforms for fashion items and maybe gadgets, but now they even shop for daily necessities online,” Zaldy said at an event recently. “Today, e-commerce platforms represent 14 percent of the retail sector as opposed to 3 percent just four years ago.”
Nevertheless, the development has not been enough to boost the logistics sector, which grew well below its actual potential at 10.5 percent in 2018, he said.
“For logistic companies, raising their service capacity is not as easy as for e-commerce platforms. A lot of logistics companies are finding it hard to develop when they focus only on e-commerce shipments,” Zaldy said.
He also quoted a report by global consulting firm McKinsey, which estimates that Indonesia will see a record high of 1.6 billion packages being shipped in 2022.
