Source:IBM retail index
Taking reference from the report from IBM’s US retail index, the e-commerce is projected to grow by nearly 20% in 2021. The most important key point from this report is the department stores retailers need to be agile to omnichannel fulfillment capabilities in order to remain competitive and drives their traffic to the stores through services such as buy online and pickup in store.
The report also mentions that large retailers such as Walmart and Target have benefited from their earlier investment of setting up e-commerce during pandemic. When we look at the categories affected by Covid-19 pandemic, most of the categories are impacted badly except the essential services such as pharmacy, grocery or the mandatory services that are allowed by the government such as building materials
When people are stuck at home during the lockdown, they have picked up the digital skill to purchase everything including grocery and food delivery. Many restaurants, bakery, shops in Malaysia have started to shift gear to promoting their products online, thus benefited the e-commerce players.
Some renowned e-commerce players are booming and expanding in scales such as Lazada, Shopee, 11streets, Fave and etc The increase trend of people shopping online has accelerated the transactions and they are in need of regional distribution centers. Not only these e-commerce players, the pandemic has also benefited logistics players especially those last-mile delivery services such as Pos Laju, GDEX, DHL, J&T, Ninjavan, EasyParcel and many more. Recently, Lazada has started offering logistics and fulfillment services and partnering with third part logistics under Lazada eLogistics (LEL), we foresee other players will have the similar move and there will be a surge in demand for large-size warehousing facilities.
Source: Mordor Intelligence
In order to provide the best end-to-consumer experience, these logistics players and last mile delivery solution providers need to hunt for strategical location for their fulfilment centers. These centers ranging from warehouses and factories, situated closer to highways, seaports, airports, and industrial parks.
Prior to the pandemic, we have seen how US-China trade war has put a strain on the supply chain and impact the global logistics outlook. Now, with the restricted movement still in effect in many countries, this has put intense pressure on the already strained supply chain.
An interesting fact by Knight Frank has pointed out that geographical diversification strategies will be crucial moving forward post pandemic after the disruption of global supply chain. The disruption of global supply chain has made the manufacturer the thought of decentralization of logistics players into multiple smaller satellite distribution hubs in the northern and southern regions of Malaysia, including Sabah and Sarawak. We have seen the benefit of having the smaller warehousing facility in increase delivery efficiency. The customers used to wait weeks or months to get the items or parcels delivered. Now, with smaller warehousing facilities, the customer can enjoy 1 or 2 days delivery services.
This is a golden opportunity for your companies to invest in industrial property to fulfill the additional demand from the decentralization strategies.
There are many multinational and international companies have chosen to establish presence in the industrial parks thus it provides great accessibility and convenience for the industrial properties. We have rich portfolio of warehouse, factories in freehold, leasehold for rent and sale located nearby Port Klang, KLIA, Subang Airport and famous industrial parks such as Shah Alam, Bukit Raja, Jelutong and etc.
Feel free to reach out to our experienced team at hello@industrialmalaysia.com.my to know more about the industrial properties and transform this crisis to great opportunity for your business.