We discussed this subject in a previous article: the development of e-commerce is largely driven by emerging countries, with China, Russia and Brazil playing the most significant role. Among the challenges to be met by foreign companies wishing to gain presence on those markets is that of logistics. How is this sector, driven by the growth in e-commerce, progressing in those emerging countries?
In March 2014, China became the largest online retail market, ahead of the USA. E-commerce grew by an annual average of 70% in the country between 2009 and 2012 (Bain & Company, 2013) and this growth is set to continue. Whilst the e-commerce market is already occupied in China by many local and international retailers, it remains open and also has ever improving logistics. Most of the largest property developers thus have at least one major e-commerce company amongst their tenants: “Yihaodian for Prologis with 100,000 m², VIPshop cooperates with Goodman in Tianjin and Amazon has plans with E-Shang and Global Logistics Properties (GLP)”, Jones Lang LaSalle points out in a survey carried out in September 2013.
A promising situation for foreign e-tailers wishing to break into this market.
Still in its infancy, logistics is also growing in this country. In 2010, the deputy Prime Minister, Sergei Ivanov, thus estimated the potential of this market to be near €109.3 billion (150 billion US dollars) by 2015. Yet and still dominated by Russian retailers, the sector is opening up to foreign retailers who keep increasing their presence within it. On the other hand, “many specialists predict that in the near future the domestic Russian CEP (courier, express and parcel) market will be further influenced by large multinationals” as they are considered to have a more significant competitive advantage compared with national companies. This is particularly the case in terms of access to financing and technology, according to the survey carried out by PwC in 2010 (Transportation & Logistics 2030), which also highlights the fact that the Russian government is prepared to actively use public-private partnerships to develop infrastructure projects.
The country sees a significant growth in the demand for e-commerce (€14.3 billion in sales in 2013) according to a survey carried out by the agency Effiliation in 2014. The logistics sector accounts for almost 12% of Brazilian GDP each year according to Ubifrance in Sao Paulo, which also notes that “sub-contracting of logistics operations is increasing” promoting the development of large national and international logistics providers. Upcoming events (FIFA World Cup 2014, Olympic Games 2016) and the increased investment inflows that they generate in the short and long terms should benefit the logistics sector in the country and drive the expansion of online retailers. On this basis, the Brazilian government implemented a growth acceleration programme (PAC 2) forecasting investments between 2011 and 2014, particularly in terms of infrastructure, of R$ 958 billion (round €400 billion).
Therefore, these three markets offer enormous opportunities. Their logistics development in parallel with the growth of e-commerce makes them promising countries for e-tailers wishing to try their luck there. Are you one of these? As a specialist in dedicated cross-border delivery solutions for e-tailers, Landmark Global surrounds itself with reliable local partners at the very heart of those growth markets. Contact our teams who will be able to guide you in your international ambitions.