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Asian Demand for Logistics to Soar with China's WTO Entry
Demand for logistics services in Asia outside Japan is set to soar 42 percent annually to US$29 billion by 2005, market research firm International Data Corp. (IDC) said on Monday.
More firms now recognised the need to outsource part of their logistics needs, which include warehousing and distribution, but international players rather than local firms were likely to benefit the most.
"It is driven by growing acceptance of the idea of outsourcing in Asia and the need for companies to build efficiency within their backend operations," IDC senior analyst Caron Harrison told reporters.
"A good way of doing that is to bring in a company expert in these areas," she said.
According to Harrison, China is poised to be the fastest growing market for logistics services as the world's most populous nation prepares for its entry into the World Trade Organisation (WTO), expected late this year.
"China is opening up and there are opportunities for foreign players. With entry into the WTO, control will move to China from Hong Kong," she said, pointing out that most goods now entered China via Hong Kong.
The Chinese logistics market, now valued at US$800 million, is expected to grow 84 percent yearly until 2005, she said.
IDC studied the logistics market in 12 economies in the region and concluded foreign players would emerge as the major beneficiaries as demand for outsourcing grows.
"The advantage will lie with the global giants, as most local firms will find it difficult to compete," the IDC report said.
Governments were likely to take a protectionist stance to help local players but this would prove futile.
"Protectionist measures are self-limiting, and while they may encourage global firms to seek out local partners, unless these tie-ups prove of value, global firms will look to operate their own networks."
The report covers Chinese mainland, Australia, Hong Kong, Indonesia, India, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand.
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