The market for the courier, express, and parcel business in Indonesia is expected to exhibit a CAGR of above 8% during the forecast period 2020-2025

New York, Feb. 09, 2021 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Indonesia Courier, Express, and Parcel (CEP) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2020 - 2025)" - https://www.reportlinker.com/p06020218/?utm_source=GNW
With rapid regional as well as global economic integration, the local businesses are continually seeking logistics and courier services that can provide direct access to local and international markets.

The courier, express, and parcel (CEP) market in Indonesia is growing rapidly in line with the e-commerce sector of the country generating significant revenues for the industry. The rise in e-commerce business in recent years is increasing the business opportunities for shipping goods. The explosive growth of the country’s e-commerce is presenting opportunities, as well as challenges for online retailers and logistics players. While the growth of e-commerce is the major driver of the CEP business, the rising demand of perishables and the growth of the life sciences sector of the country also support the growth of the express delivery in the future.

The high logistics cost remains to be one of the challenges for the logistics sector as well as for the CEP market. Lack of proper infrastructure makes it difficult for delivering the parcels, especially for remote areas outside Java. Additionally, Indonesia being an archipelago makes it difficult for companies to deliver packages throughout the country. During the COVID-19 pandemic, local online courier services in Palembang are expanding at a fast pace. A number of the order shuttle businesses were flooded with orders because residents were reluctant to leave their homes.

Key Market Trends
CEP Market is Growing In-line with Growing E-commerce

The growth of e-commerce has opened up opportunities for many logistics companies for providing delivery services. E-commerce is rapidly growing in the country driven by the growth of information and communication technology, rising middle-class population and smartphone penetration. For instance, JNE Express, one of the leading courier companies in the country has captured the big opportunity in an e-commerce business which accounts for almost 60-70% of its shipments. Digitization is also enabling the consumers to reach the global markets promoting cross-border e-commerce and driving the international CEP market.

Pos Indonesia plans to make a significant investment, especially in processing centers and storage capacity. Its storage capacity was around 40,000 square meter in November 2016, and the company is considering expanding to 500,000 square meters, by the end of 2020 supporting the growing demand for advanced storage spaces in the market.

With Indonesia’s eCommerce market standing at USD 21.0 billion in gross market value (GMV) in 2019, Indonesia is currently an eCommerce hotbed in Southeast Asia. This industry is seeing lots of investment and has great potential to continue being one of the biggest eCommerce economies in Southeast Asia. Additionally, the companies are optimistic about the government’s commitment toward improving infrastructure.

Growth in Manufacturing and Automotive Industry: an Opportunity for CEP Market

The growth in the manufacturing sector is expected to boost the demand for express delivery and logistics services. The express deliveries of industrial products are vital in avoiding stock shortages. The government has ambitious plans to propel the country into the top ten biggest economies in the world by 2030, with manufacturing at the heart of this goal. The main areas of production include textiles and garments, food and beverages (F&B), electronics, automotive, and chemicals, with the majority of manufacturers in this sector comprising of micro, small, or medium-sized enterprises.

The Indonesian automotive industry has become an important pillar of the country’s manufacturing sector, as many of the world’s well-known car corporations have re-opened manufacturing plants or expanded production capacity. Moreover, Indonesia experienced a remarkable transition as it evolved from being a merely export-oriented car production center into a major domestic car sales market due to rising per capita GDP.

The COVID-19 pandemic has made many manufacturing and automotive companies question their heavy reliance on China, while China’s trade war with the United States has also burdened the industries with additional tariffs. Indonesia has taken measures to take advantage of the situation, with the government establishing a special task force to attract businesses leaving China is expected to facilitate the growth of its logistics sector.

Competitive Landscape
The Indonesian CEP market is dominated by long-established players, such as JNE Express, Pos Indonesia, and DHL. Other significant players in the market include TIKI, Pandu Logistics, Pahala Express, SAP Express, etc. Technology has become important for companies to increase their efficiency and to attract customers in this era of Industrial Revolution 4.0. For example, Pos Indonesia is conducting trials with robots to chat, that has no voice support. J&T Express is another example of a company that has expanded rapidly in the past three years. A lot of delivery companies that are online-based or employing high technology are entering the market offering faster delivery services and presenting strong competition to conventional players as well.

Given the growth trajectory of the CEP and warehousing market in the country, DHL Express, one of the leading global companies has invested USD 19 million in Indonesia to build the Jakarta Distribution Center (JDC) to support the logistics activities and gain a competitive advantage over the other players.

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