The logistics and freight market of Malaysia has significantly developed last few years. It has grown enough to grab the attention of international investors and businesses. The sudden spike in this sector of Malaysia is the result of the rise in the e-commerce market.
Other than that, the recent interest of various companies in certain sectors like last-mile delivery service, cold chain logistics, etc. has grown by a great level. This market is only expected to increase by a great deal in the following years. In this article, we will discuss the present Malaysian market as well as the forecasts, so stick to us until the end of the post.
5 Malaysian Market Trends In Logistics
Here are the present market trends that are driving the logistics services and warehouse management systems in Malaysia:
1. Growing Infrastructures
The Malaysian government has taken up the mantle of developing various infrastructures across the country, and they are creating new infrastructures as well. Most of these buildings are being built to aid the public as well as the government in different ways.
However, other than these, the growing infrastructures are also utilizing the logistics sector a lot, which is why this sector is being improved to meet the growing needs as well. So, it seems that developing the infrastructures is developing the logistics sector as well.
Malaysia is looking at new opportunities for improving the infrastructures further. They are already in talks with China for improving the East Coast Rail Links corridor.
2. E-Commerce
E-commerce is one of the major sectors that are driving the logistics sectors of Malaysia. The e-commerce market of Malaysia was worth USD 3.8 Billion approximately, but it is expected to surpass USD 5.7 Billion by the end of 2023. The compound annual growth rate of the e-commerce sector stood at 11.5%, which is expected to grow even higher.
Due to its rapid growth, Malaysia has become one of the most attractive e-commerce markets in Southeast Asia. As of this moment, there are around 26 million active internet users, which sums up to nearly 80% of the entire population. This percentage will increase, and so will the e-commerce sales.
The ecommerce sector is heavily dependent on the logistics sector. Unless the logistics services deliver the products to the doorstep of the people, the e-commerce industry won’t be able to stand even. This is why this is considered to be one of the major driving sectors of the logistics sector.
3. Presence Of High Competition
The competition in the logistics sector in Malaysia is huge, and it is only increasing. Well, why would it not? The logistics sector is profitable, and everyone is trying to bite a chunk out of this. Due to this, there are lots of warehouse management systems, independent truckers, as well as SMEs. The percentage of companies or individuals who are working independently in this sector accumulates to more than 70% and growing.
However, the industry is expected to turn to a consolidated state in the future, which will cause all the different companies to merge, or the greater companies will end up buying the smaller ones. This will only make the sector bigger so that it can provide enough space for the growing market.
4. Warehousing
Due to the increase in the logistics sector, there has been a great increase in the warehousing sector as well, which is essentially a sub-sector of logistics. Warehouse management systems are being developed constantly, as these are the hearts of any warehousing company.
A lot of businesses and companies are resorting to outsourcing when it comes to storing their goods. This is allowing them to cut the costs to a great extent. So, the number of companies that provide warehouse management systems for outsourcing is increasing too.
5. Growing Maritime Sector
With the 19th longest coastline in the world, Malaysia has a lot of opportunities when it comes to maritime logistics. Due to their geographic location, they have a benefit too. Several major ports in Malaysia are helping other countries trade. These ports are also being used for importing and exporting different goods.
The long coastline makes Malaysia a great hub for transshipment. 70% of the goods processed through their ports belong to transshipment.
Most Emerging Sector
Halal Logistics:
The halal market has become one of the major markets of Malaysia, and this is growing faster than ever. This market mainly deals with products that are legal in the eyes of Islamic Sharia. Halal markets are seen in abundance in the Middle East and some regions of Asia, such as Malaysia.
The companies that import and export halal products are being referred to as halal logistics, and the number of such companies is only increasing. The Malaysian government has identified this as an opportunity of growing, and they are seizing it by promoting itself as a gateway of Halal products.
Then again, even though this sector holds many promises, there aren’t many services that provide end-to-end halal logistics now. This is another reason why many new companies are striving to achieve perfection in this sector, which is quite challenging.
Cold Chain:
The cold chain is another growing sector. This essentially deals with the transportation of cold products such as frozen fish, meat, dairy products like ice creams, etc. As Malaysia has a warm climate, it is tough to keep different goods fresh in regular transportation methods.
So, the number of Malaysian trucks and other vehicles that transfer cold products is increasing. There has also been a major spike in the number of independent truckers in this sector.
Malaysian Market Conclusion
The logistics sector of Malaysia is growing faster than ever, and this is only expected to rise. To cope up with the needs of the growing logistical sector, a lot of new warehouse management systems are being introduced.
Overall, this Malaysian sector is a good pick for anyone who is looking forward to starting their own logistics service or wants to invest in another business.
