Exploding Demand for Warehouses for E-Commerce

From the explosive demand for e-commerce

Vietnam is currently in the group of countries with high e-commerce growth rates. In 2020, Vietnam’s e-commerce revenue reached 14 billion USD.

This number is expected to increase to 52 billion USD by 2025. In addition, Vietnam is also benefiting from the China +1 policy when the trend is to move factories from China to Southeast Asia.

In particular, the rise of new transportation and supply chain trends in the digital economy has helped Vietnam become a potential emerging market. In particular, the explosion of e-commerce with online sales channels such as Lazada, Tiki or Shopee has become a potential opportunity for investors to develop modern logistics infrastructure to serve customers. service for the development of the goods supply chain.

According to experts, the COVID-19 pandemic helps accelerate the e-commerce industry; The needs of buyers and sellers have changed. Online trading channels began to develop and were built into professional strategies. Vietnam currently only has a few commercial platforms such as Lazada, Shopee… and in the near future there will be many other commercial platforms participating in this market.

Besides, Vietnam currently does not have a supply source for e-commerce logistics, the vast majority of warehouses are still following traditional methods. Now some brands are looking to invest in their own e-commerce ecosystems. Therefore, e-commerce in Vietnam still has opportunities for investors.

According to Mr. Nelson Wu – General Director of Best Inc Vietnam, although the stressful period of the COVID-19 pandemic has passed, the habits of consumers who mainly transacted online during that time have not changed. Online shopping continues to grow. That means warehouse demand for e-commerce is also increasing.

According to a representative of BW Industrial Company, the COVID-19 epidemic has caused businesses to need to store a lot of raw materials and finished products for retail, increasing warehouses near ports and production areas.

Vietnam is always considered one of the backup solutions because of its strategic location and stable policies. Therefore, investors tend to choose Vietnam, instead of other Southeast Asian countries, to invest.

To the attraction of e-commerce warehouse investment

According to forecasts, the global supply sector will grow dramatically in the near future.

The main driving force of this trend comes from the development of e-commerce and the race to expand warehouse space to ensure the supply chains of international companies.

In Vietnam, this is said to be the destination of many businesses in the manufacturing and logistics sectors. In particular, with the development of the domestic e-commerce industry, the demand for warehousing for e-commerce in Vietnam will continue to increase in the near future.

Because according to the 2022 emerging market logistics index report recently announced by transportation and logistics service provider Agility, Vietnam ranked 11th out of 50 emerging logistics markets.

Vietnam’s transportation and logistics market is estimated to grow at a compound annual growth rate (CAGR) of 7% in the period 2021 – 2026.

According to Ms. Trang Bui – General Director of Cushman & Wakefield Vietnam, Vietnam is currently transforming rapidly in developing both logistics and industrial real estate assets. Currently, 60% are traditional warehouses and the trend is to move to Grade A real estate and warehouses. Businesses in this industry all have good business results.

In fact, Vietnam’s logistics industry is growing rapidly thanks to the development of the national economy. In particular, Vietnam’s logistics industry is growing strongly, especially thanks to the growth of the e-commerce industry.

This is also one of the factors causing demand for logistics real estate to increase sharply.

As for investors, with current investment trends, investors are prioritizing the selection of investment locations that are convenient for logistics chains, especially warehouses, to minimize the impact from these factors. objective factors such as epidemics.

Therefore, according to forecasts, within the next 5 years, there will be about 40,000 hectares of industrial park land supplied to the market. Warehouses are also receiving new and rapid investment attention. By 2025, it will grow by 22%, with standard A and B warehouses.

According to Mr. Nguyen Thanh Phuong – General Director of Sao Do Group, the disruption of the supply and demand chain due to the epidemic and the growing e-commerce trend are growing in the world.

FDI investors are increasingly interested in modern warehouses and warehouses for e-commerce activities.

Right from the start of building the industrial park infrastructure, the business determined that this would be an advantageous industrial park with an internal seaport. Therefore, the enterprise has spent 200 hectares to develop the seaport and logistics subdivision.

This area currently has 7 container and general cargo wharves; Bonded warehouse and logistics areas are invested in infrastructure with modern, synchronous standards and are continuing to receive additional investment.