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The surge of e-commerce and its impact on logistics sector

As the Covid-19 pandemic forced the closure of brick-and-mortar stores nationwide, both consumers and businesses shifted towards online marketplaces, resulting in a significant surge in e-commerce activity.

According to analytics firm GlobalData, e-commerce sales in Malaysia reached RM31.9 billion in 2021. Projections indicate that the country’s e-commerce market will grow by an annual rate of 16.1% from 2022, reaching RM69.3 billion by 2026.

However, the successful fulfillment of online orders relies heavily on a dependable logistics infrastructure to deliver goods to consumers.

FMT Business examines how e-commerce has reshaped consumer habits, catalyzed growth in the logistics sector, and enhanced the overall digital landscape of the country.

The Expansion of the Logistics Sector

Chin Chee Seong, president of the Malaysia Cross Border e-Commerce Association, notes that the pandemic acted as a catalyst for the surge in e-commerce and logistics activities. He emphasizes the symbiotic relationship between e-commerce and logistics, stating that the growth of one sector complements the other.

As consumers increasingly embrace online shopping, logistics companies have had to adapt by providing efficient and reliable services. Veera Pandiyan Kaliani Sundram, president of the Malaysia Logistics Supply Chain Association, observes that the logistics industry has evolved to meet the demands of the digital economy and changing market dynamics. The rise of e-commerce has prompted logistics firms to invest in technology and infrastructure, improving delivery capabilities and expanding the sector.

Despite the challenges posed by the pandemic, the logistics industry is poised for continued growth. Veera notes that companies have enhanced operational efficiency and agility through technology investments. However, evolving consumer expectations, heightened competition, and sustainability concerns present new challenges for logistics players.

Supporting Logistics Providers

Looking ahead, Chin emphasizes the importance of logistics companies, particularly third-party logistics (3PL) providers, having multiple warehouses closer to consumers to facilitate faster delivery. This, he believes, is crucial for the growth of both the industry and e-commerce.

As the e-commerce industry continues to expand, the need for efficient and reliable logistics services becomes increasingly evident. However, to achieve this, greater industry support and economic opportunities are essential.

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