Vietnam’s logistics market getting hot


The race to expand the logistics market share is getting hot when foreign businesses are continually pouring capital into and scaling up their operations in Vietnam. 

Photo: VNA

China’s Alibaba made a new stride to raise its logistics market share when the Cainiao P.A.T Logistics Park of its affiliate Cainiao Network has officially operated since the second quarter. Cainiao Network said its target customers are small- and medium-sized enterprises, accounting for 97 percent of the roughly 800,000 businesses in Vietnam.

Alibaba added that it would develop the second logistics chain in southern Dong Nai province, noting that this smart logistics center will cover 168,000s q.m. and lease about 90,000 sq.m. of the area to businesses amid disrupted supply chains.

Many large logistics projects were invested in Vietnam in the first two months of this year

The Singapore-based SEA Logistic Partners (SLP) kicked off construction of the SLP Park Xuyen A project at the Xuyen A Industrial Park in Long An province in late February. With a total area of over 61,000 sq.m., this project is set to supply Grade-A warehouses.

Through the joint venture with the logistics real estate firm GLP, SLP has had six projects licensed in Vietnam so far and is planning to continue boosting investment in this sector in the time ahead.

In January, Singapore’s Emergent Vietnam Logistics Development Pte. Ltd announced a 35 million USD project on logistics services, including cold storage warehouses, to meet the growing demand of enterprises in the country.

Savills Vietnam said booming e-commerce, optimistic economic growth, and growing domestic production and consumption have been generating real opportunities for the logistics sector, especially when those operating in e-commerce need more storage space than traditional retailers. Therefore, with more modern logistics centers and more effective management solutions, the economy will be able to address the weaknesses in the supply chain, warehousing, sorting, preservation, and processing.

The logistics market in Vietnam is predicted to grow strongly, by 14 - 16 percent annually to about 40 - 42 billion USD.

The influx of foreign investment in logistics is causing substantial competitive pressure on domestic firms since foreign businesses hold capital and technological advantages.

The Vietnam Logistics Business Association (VLA) pointed out that foreign firms currently dominate the market. In contrast, local ones are small, lack experience, and are connected with supply chains links or with exporters and importers.

Given this, VLA proposed the Government step up developing national expressways, adapt the Commercial Law to the current logistics situation, and create support policies for Vietnamese logistics businesses./.


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