International trade has been severely impacted by the pandemic. Not only have consumer habits changed but new medicines and vaccines require new capabilities in logistics to be properly delivered and stored. These changes are forcing the sector to adapt.
Vietnam is one of the fastest-growing e-commerce markets in Southeast Asia, with revenue by the end of this year expected to reach $13 billion. In recent years, the supply chain has increasingly focused on consumers, with the speed of delivery a primary factor in making purchasing decisions.
The cold is a shifting trend of logistics real estate. Image: internet
With stay-at-home requirements, more customers shop online. This required competitive prices and strict delivery schedules. The variety of goods, not only dry goods delivery but also cold storage for food and temperature-sensitive items such as pharmaceuticals, vaccines, and cosmetics entered into this ecosystem drove the demand for expanding services.
In 2019 the global cold chain market was valued at $4.7 billion and is expected to reach $8.2 billion by 2025 with an average annual growth rate of 12.5 per cent. Domestic and international investors have long been targeting cold chains and there is a need for more cold storage located closer to customers to serve the demand for temperature-sensitive products. Another driving force for cold storage is specialised healthcare products.
The COVID-19 vaccine distribution process – an unprecedented service in the logistics market – requires a very low temperature that is not normally required in standard cold storage. The need for new facilities and capabilities to meet this demand promises to bring significant profit to investors and service providers who can seize the opportunity via investment of logistics real estate, special cold storage.
Vietnam has become an ideal place for foreign investors over the last two decades. Despite the pandemic, it still ranked second in the COVID Performance Index and has proven a safe place for foreign investment.
To facilitate foreign investors to invest in supply chains to meet the demand for multi-method logistics and cold chains, the government has loosened rules on real estate investment, particularly logistics real estate.
Given the above conditions, logistics real estate will have many areas for development and very good growth momentum in 2021-2022.