Last Mile Delivery Market in Asia-Pacific: Drivers, Trends, and Challenges - 2023-2027
The last mile delivery market is in the midst of a significant upswing, poised to register an impressive Compound Annual Growth Rate (CAGR) of 15.62% between 2022 and 2027, propelling its market size to a projected upsurge of USD 165.6 billion. This growth story is intricately woven with key drivers, compelling trends, and formidable challenges that characterize the realm of last mile delivery.
Crucial Driver: The Expanding Global E-commerce Phenomenon
A pivotal catalyst for the global last mile delivery market is the burgeoning global e-commerce industry. Notably, China and the United States are at the forefront of this e-commerce boom. For instance, Q1 2021 witnessed a remarkable 39% surge in e-commerce retail sales in the US when compared to Q1 2020. In stark contrast, total retail sales exhibited a growth rate of only 16.4% in Q1 2021. China's impressive roster of e-commerce players significantly contributes to the exponential growth of the B2B last-mile delivery sector.
The e-commerce surge has prompted several major logistics providers, such as XPO Logistics, to extend their services to encompass last-mile deliveries. In fact, a staggering 13 million packages are delivered annually through XPO Logistics, with last-mile deliveries constituting a substantial market share. The North American online retail sector is poised for continuous expansion and investments throughout the forecast period. This sustained growth is expected to propel the demand for last mile delivery services.
Compelling Trend: Technological Advancements Take Center Stage
A pivotal trend in the last mile delivery market is the unwavering focus on technological innovations. Advanced technology, particularly real-time tracking solutions, is increasingly gaining prominence. These tools empower consumers to effortlessly manage and modify their retail deliveries using accessible online platforms. This enhanced visibility equips customers with complete control over package delivery, fostering a seamless and transparent experience.
The delivery of large or high-value goods presents a unique set of challenges as they often require direct customer collection during delivery. To address this challenge, delivery providers are rolling out web and mobile-based last-mile delivery management applications. These applications facilitate real-time management of package delivery, enabling electronic rescheduling and providing timely notifications/alerts to customers, including email, electronic messages, and voice calls, in cases of delays due to adverse weather or heavy traffic. The proliferation of these technological advancements is anticipated to exert a positive impact on the growth of the last mile delivery industry during the forecast period.
Formidable Challenge: Operational Hurdles
A significant roadblock faced by last mile delivery companies is the operational challenges that threaten the growth of the global market. The inherent complexity of last-mile delivery operations demands a delicate balance between transparency, delivery efficiency, and profitability. Unlike long-distance transportation, which leverages cost-effective bulk logistics through sea, rail, and road, last-mile delivery requires separate deliveries to a multitude of locations within a region. This intricate process inherently escalates logistics costs.
领英推荐
Labor and fuel costs represent a substantial portion of the costs associated with last-mile delivery. The modern online shopper prefers real-time tracking of transported goods, necessitating further investments by service providers. To support real-time tracking, service providers must deploy additional geolocation-related infrastructure and utilize technologies such as radio frequency identification (RFID) sensors and tracking codes generation at every delivery station. These technologies, while enhancing service quality, incur additional expenses, thereby contributing to the escalation of delivery charges. Consequently, the operational hurdles facing last mile delivery companies are poised to pose challenges to market growth during the forecast period.
Notable Players in the Last Mile Delivery Landscape
Key industry players are crafting strategies that include strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and the launch of innovative product and service offerings to fortify their market presence. Some noteworthy contributors to the last mile delivery sector include:
For details on companies and their offerings, click the link to buy this report: https://www.technavio.com/last-mile-delivery-market-size-industry-analysis/full-report
The competitive landscape in the last mile delivery domain is subject to in-depth analysis, encompassing a comprehensive evaluation of these industry players. This includes a qualitative and quantitative assessment, categorizing vendors based on their orientation and dominance in the market.
Regional Outlook: APAC Takes Center Stage
The last mile delivery market in the Asia-Pacific (APAC) region is poised to take center stage, projected to contribute a remarkable 40% growth by 2027. China is a key revenue contributor in APAC, boasting the fastest-growing e-commerce market in the region. In the last five years, e-commerce sales in China have soared by an impressive 28%. This growth is further accentuated by the presence of major e-commerce giants such as Alibaba and Jingdong.
Additionally, APAC has witnessed the rapid proliferation of small and medium-sized regional e-commerce players. The growing e-commerce sector is set to intensify the demand for last-mile delivery services within this region.
In summary, last mile delivery is undergoing a transformative phase, fueling growth through the surge of global e-commerce, innovative technological solutions, and dynamic regional expansions, while overcoming operational challenges to deliver packages to your doorstep.