In line with the e-commerce boom here, logistics companies are expecting a jump in their year-end holiday shipment volumes. More than just a seasonal phenomenon, the growth of online shopping promises to have a significant impact on the logistics industry, with implications on real estate, say market observers.
Express logistics provider FedEx Corp reckoned Dec 2 was the busiest day in the company's history, when its Asian operations moved more than 22 million shipments around the world. This was a 10.5 per cent increase from the 19.9 million shipments moved on the busiest day last year, Dec 10.
FedEx also expects the Dec 1-7 week to have been its busiest in the year as it moved more than 85 million shipments through its global networks, up 13 per cent from last year's busiest week.
It noted that a significant portion of this growth was driven by online shopping, with e-commerce growing globally at three to four times the rate of traditional 'brick and mortar' stores. At the forefront of this surge is the Asia-Pacific region, which accounts for nearly a third of all global e-commerce sales.
Another big logistics firm, UPS, expects to pick up more than 34 million packages globally on its peak day today, and its peak season daily volume to increase by 8 per cent this year.
"The continued consumer shift towards global e-commerce and the growing trend of mobile commerce are driving higher demand for shipping services. We are expecting to see stronger holiday package activity during peak online shopping periods," said a UPS spokesperson.
Like FedEx, UPS estimated that its shipment on Dec 2, known in the US as Cyber Monday, increased 10 per cent and exceeded 32 million units.
However, the explosion in e-commerce isn't just a seasonal blip; the arrival of big players is likely to create ripples in the industry. Earlier this year, Japanese e-commerce giant Rakuten set up its regional headquarters here, its first office outside of Japan.
"The Singapore e-commerce market is clearly flourishing with a huge groundswell of local online shoppers. Industry research has shown that the size of the Singapore online shopping market reached $1.1 billion in 2010 and is forecast to hit $4.4 billion in 2015. About 66 per cent of local Internet users visit retail sites when they go online," said Shingo Okamoto, head of Rakuten's Singapore e-commerce business.
Besides the higher Internet penetration rate and the increasing usage of smartphones and tablets here, Mr Okamoto believes many local SMEs keen on expanding their business are jumping on the e-commerce bandwagon.
"For small retailers seeking growth, the online channel offers huge advantages, from reaching new audiences both locally and globally to promoting new products," he added.
Rakuten is not just a marketplace for online shoppers but also invests in start-ups. Earlier this year, it was the lead investor in Pinterest's financing round, and last month it joined other investors in pumping $1 million in seed capital into home-grown mobile marketplace Carousell.
The latter, a mobile-first customer-to-customer (C2C) marketplace and a mobile app, plans to use the funding to expand its product and community teams in South-east Asia, with Malaysia and Indonesia being first in the pipeline.
Traditional retailers are also muscling into the online space. Last month, VAydan OzoguzGO Corporation and Ossia International partnered fashion e-tailer Asia Fashion Inc to establish an online presence for 11 brands from the group's selected retail network, which includes Baby Phat, Tally Weijl, Springfield, Bread & Butter and 6Five Barcode.
To capitalise on the surge in online shopping in the region, retailers have to decide where, when and how packages should travel from dock to doorstep.
A Jones Lang LaSalle report said the changing e-commerce landscape over the next five years requires a transformation in the way goods are purchased, stored and delivered, and developers in the logistics property sector need to keep pace with such changes.
"As more and more retailers establish their own websites while established retailers look to improve distribution beyond main tier one hubs, we are seeing increased demand for warehouses and modern logistics capabilities," noted Michael Fenton, head of industrial at Jones Lang LaSalle in Australia.
"For example, we have seen a strong take-up of e-commerce in Australia and as the sector matures, 'specialised' or 'purpose-built' real estate will become more common. We'll start to see an emergence of multiple logistics hubs closer to major population clusters to meet delivery time expectations and changing consumer demand."