The outlook for ecommerce remains strong despite tighter rules that may slow its growth, as consumers are expected to continue favouring online platforms for convenience, extensive product selection and competitive pricing.
Ken Lee, CEO of DHL Express Asia Pacific, said the emergence of “social commerce” – the practice of selling products and services directly on social media platforms, allowing customers to shop without leaving the app – will also continue to boost online purchases.
“The outlook for ecommerce is expected to remain positive. Ecommerce has been experiencing significant growth over the past decade, and this trend is expected to stay, given continued growth in internet and smartphone usage,” Lee told Asia Cargo News.
“The convenience, wide product selection and competitive pricing offered by ecommerce platforms attract consumers and drive demand.”
He continued: “Additionally, with social commerce coming to the fore, we anticipate e-commerce to remain resilient overall.”
Lee cited a recent DHL survey on ecommerce trends, which found that more than 90% of survey respondents from Asia-Pacific have purchased on social media platforms, such as TikTok, Instagram and Facebook.
There has also been growth in B2B ecommerce sales, as more corporate decision-makers are becoming willing to make large-ticket purchases online.
“About 35% reported that they are willing to spend US$500,000 or more in a single transaction on digital channels thanks to encrypted payment systems,” Lee said, adding that this enables businesses to feel more confident to make large purchases on ecommerce platforms.
The global ecommerce market is expected to grow at a Compound Annual Growth Rate (CAGR) of 7% until 2030, while cross-border ecommerce is expected to grow 10-15% until 2030.
Meanwhile, Lee told Asia Cargo News that plans in the U.S. to impose drastic changes on the de minimis rule, which permits personal imports of lower value than US$800 to be brought into the country without duties and customs clearance, could slow down the growth of cross-border ecommerce.
On September 13, 2024, the White House announced plans to limit the types of goods that can be imported under the de minimis exemption and require additional shipment information to be filed.
The Biden administration urged the U.S. Congress to enact legislation by the end of the year, saying the proposed changes to rules don’t go far enough. However, it is still uncertain how quickly they will finalize the new rules before the inauguration of the new Trump administration on January 20, 2025.
“The executive action has not taken place, so it is difficult to say if any volume fluctuation is due to the announcement or any other factors,” Lee said.
“If stricter de minimis requirements were to be implemented, more packages could be subjected to customs procedures, leading to delays in processing and delivery times. It could also motivate consumers to shop more domestically, making cross-border ecommerce less attractive,” he added.
The DHL Express Asia Pacific CEO further said that ecommerce businesses will also incur increased costs due to stricter compliance, documentation and tax payments. Smaller ecommerce businesses may also struggle to absorb these costs, affecting their ability to compete.
“Potential changes in the de minimis legislation could impact future logistics in the long run and slow down the growth of cross-border ecommerce, as they may create barriers, increase the complexity for logistics companies, and increase costs for both ecommerce businesses and consumers,” Lee told Asia Cargo News.
For DHL, ecommerce has been a consistent growth driver in recent years and will remain one of the “megatrends” that DHL will continue to focus on. But the group also expects growth in temperature-controlled and energy-related shipments.
“As outlined in our latest Strategy 2030, ecommerce stays as a strategic growth pillar for DHL Group,” Lee told Asia Cargo News. “The life sciences and healthcare sectors are [also] anticipated to expand significantly due to technological progress and an ageing population. As such, we will also see a shift towards biopharma, cell and gene therapies.”
“Equally growing in importance is the new energy sector, where the transformation to renewable technologies in the energy and automobility sectors results in more complex logistics solutions to handle windmill blades or battery energy storage systems,” he added, noting that an expected CAGR of more than 15% per annum between 2023 and 2030 offers DHL a “significant growth potential.”
Meanwhile, moving into the traditional peak season, Lee said volumes this year could align with the level seen in 2023, primarily driven by ecommerce.
“We expect this peak season to be much like last year’s, where we see the traditional ‘hockey stick’ surge in volumes in the fourth quarter,” he said. “However, it remains to be seen how pronounced the seasonal uplift will turn out, as it depends on consumer behaviour, which could make a significant switch toward the end of the year.”
“As China is a major player in cross-border ecommerce, we expect to see a high-level shipment volume increase on the China outbound lane to the rest of the world during the upcoming peak season. In particular, the China-U.S. lane will remain one of the most important and busiest trade lanes,” Lee added.
He also noted that the company has added extra capacity in preparation for peak volumes.
“Worldwide ecommerce sales will continue to drive an increase in cross-border shipment volume during the peak season. This will impact the demand for space and capacity, which escalates significantly due to a large volume of parcels. This is why we have ramped up our investments of more than €100 million (US$10.3 million) to increase our aviation and handling capacity in the fourth quarter to support our customer’s demand and prevent capacity constraints,” Lee told Asia Cargo News.
“The investment enhances our dedicated air freight network and will go into the phased deployment of eight new Boeing 777 freighters on trans-Pacific and intercontinental routes between Asia and Europe,” he added.
Aside from boosting capacity on these key lanes, the new freighters are also part of the ongoing modernization of DHL’s airfreight fleet as the company transition to lower-greenhouse gas emission transportation.
By Charlee C. Delavin
Asia Cargo News | Hong Kong
