The economic value of Asia’s last mile delivery
17 Apr 20237 min read
Summary
- Asia’s last‑mile delivery segment is rapidly gaining economic value, driven by the growth of e‑commerce and rising consumer expectations for fast, convenient deliveries.
- This final delivery leg is often the most expensive and complex part of the logistics chain, so companies are investing in technologies such as route optimisation, delivery drones, lockers and autonomous vehicles to improve efficiency and customer experience.
- Despite strong growth potential, businesses must address challenges like infrastructure constraints, traffic congestion, fragmented addressing systems and high operational costs if they are to capture this value in a sustainable way.
The rise of e-commerce and the advent of online shopping platforms have put the spotlight on Asia’s last mile delivery industry. According to Straits Research, the global last mile delivery market value can grow at a compound annual growth rate of 12.31% towards 2030 from its US$40.5 billion economic value in 2021.
Last mile delivery refers to the final stage of the delivery process, where a product is being moved from a distribution center to the end customer. Its main goal is to fast-track the sent products from every package receiving service hub within the logistics industry.
The delivery segment in logistics management plays a crucial role in the supply chain process. It can make or break the shopping experience. As the last mile delivery market in Asia continues to grow, certain businesses have begun to optimize their delivery process by using new technologies and innovative delivery models.
E-commerce in Asia
The growth of e-commerce has been a key driving force behind the expansion of the last mile delivery industry in Asia. The Research Institute for ASEAN and East Asia foresees that the e-commerce market in Asia may reach US$2.7 trillion within 2023, with China and India being the largest markets.
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