Enhanced Connectivity Is Disrupting Asia’s Logistics

By Karen Reddington | February 27, 2018

Karen Reddington, President of FedEx APAC, reveals the four trends on how the increasing connectivity is changing the business landscape in Asia.

Connectivity is changing the face of business in Asia Pacific and the world. Today, the globe is more connected than ever, by way of advanced technology that was unfathomable a decade ago. The momentum of connectivity will continue and play its part in all aspects of our daily lives even if we are unaware of their existence. Think about the sensors that monitor urban conditions such as traffic, air quality and noise, the technology is almost invisible but is bringing us critical information to improve sustainability, efficiency and quality of life.

The rapid advancement of technology that boosts global connectivity is a powerful trend set to impact individuals and businesses of all kinds, and the logistics industry is no exception. While it is difficult to predict what exactly will happen next, there are four key trends that we believe are important to the business world, especially in Asia.
1. Small businesses will flourish in the online marketplace
Online commerce has revolutionized how the world conducts businesses. In particular, Asia Pacific, home to four of the world’s top 10 e-commerce markets[1], is leading the charge.Traditionally, small businesses have fewer resources and budgets. However, nowadays, a business idea can be realized with as little as a mobile device, allowing business to happen anywhere. Businesses, from a new start-up to a long-established medium-sized business, can now ride on opportunities provided by our hyper-connected world and be part of international e-commerce.

2. The digital and physical world must co-exist
While the digital economy is experiencing high growth in Asia[2], its growth cannot be standalone; a strong physical support is required for all e-commerce activities to flourish. A good example would be the global transportation network. It is a fundamental ingredient in the magical formula to make the two worlds – the digital and physical – work.With a strong global transportation network that is making trade easier, more affordable and faster[3], companies of all sizes now have access to global markets that were once unreachable. This is a key factor contributing to a global trade market worth in excess of US$15 trillion.

3. Global supply chains: the match point of business success
Digitalization has lowered the barriers for small businesses to enter global markets, but this also means that the competition is intensifying. To achieve long-term business success, a global supply chain that run smoothly and meet growing customer needs is critical.Especially nowadays, customers expect businesses to be accountable for the entire customer journey, even the parts they are not directly responsible for. If a business can ensure end-to-end experiences from order to return, it’s one step ahead of the game to inspire loyalty and drive repeat business. This ecosystem must encompass global reach and the power to reach millions of consumers, but also secure payment, fulfilment, tracking, returns, even shopping cart management – but also the right intelligence to expand choice, flexibility, and to customize the overall service experience

4. The influx of high-tech businesses and high-value added goods
In Asia, one of the most prominent challenges faced by many is the aging population. As such, demand for high-tech and high-value added goods for the healthcare industry is on a rise, fuelling remarkable growth across the region. The transportation of such packages comes with unique requirements like temperature-control.With the proliferation of Internet of Things, high-tech and high-value added goods can be transported with near real-time visibility in a way that you couldn’t before, ensuring the goods remain viable and safe.
While connectivity is impacting businesses of all kinds, it’s important to know that it’s the underlying trends like the rise of small businesses that are fundamentally reshaping the business landscape today. All in all, the above trends are just the beginning to the hyper-connected world. We expect businesses in Asia will continue to grow and evolve as the contents of our planes and vehicles keep changing.
***

[1] China, South Korea, Japan and Australia, e-Commerce Foundation 2016
https://www.ecommercewiki.org/wikis/www.ecommercewiki.org/images/5/56/Global_B2C_Ecommerce_Report_2016.pdf

[2] Digital economy distorts true size of Asian economies, Nikkei, December 7, 2017
https://asia.nikkei.com/Politics-Economy/Economy/Digital-economy-distorts-true-size-of-Asian-economies

[3] FedEx 2016 Annual Report & FedEx 2017 GCR for this and following source points

About the Author
authors photo

Karen Reddington

Former President,
Asia Pacific, FedEx Express

President of FedEx Express Asia Pacific for 5 years, Karen is now the FedEx Express President of Europe and CEO of TNT. Karen is based in the Netherlands.

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