1. In February 2021, Malaysia has been named among the top ten attractive nations to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
2. Freight forwarding and contract logistics provider Agility said Asia-Pacific nations led all emerging market regions with China, India and Indonesia being the world’s top emerging markets in the 12th annual Agility Emerging Markets Logistics Index, a broad gauge of competitiveness based on logistics strength and business fundamentals.
3. The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
4. Among ASEAN countries, Vietnam climbed three spots to No. 8 overall. Indonesia (3), Malaysia (5) and Thailand (11); the Philippines rose one spot to No. 21.
5. China and Vietnam were virtually alone in the world in 2020, posting positive gross domestic product growth for the year after being hit early by economic fallout from the COVID-19 pandemic.
6. 1,200 logistics industry executives surveyed for Agility’s Index indicate little desire to uproot from China or other markets, preferring by a two-to-one margin to protect their supply chains by accelerating adoption of digital tools and technology (41.3%) as opposed to pursuing multi-shoring, near-shoring or reshoring strategies (21.9%).
7. Of those who would consider moving out of China, more respondents chose Vietnam as a preferred production hub than any other country (19.6%).
8. Other Asian markets – India (17.4%), Indonesia (12.4%), Thailand (10.3%) and Malaysia – are the next leading choices.
9. Only 7.8% of industry executives say relocating production from China would mean reshoring to their home countries.
10. Across 50 countries, China, India and Indonesia rank highest in the Index for domestic logistics. China, India and Mexico are on top for international logistics with Vietnam 4th, Indonesia 5th, and Malaysia 7th.
MALAYSIA IN DEPTH ANALYSIS
1. Malaysia’s diversified economy means the country has dealt well with the impact of the Covid-19 pandemic. Despite the IMF asserting that GDP fell 6%, Malaysia’s high-tech, manufacturing and services sectors all played a role in limiting the depth of the impact made by the Covid-19 pandemic.
2. The country was also able to respond to the pandemic by deploying spending and stimulus packages equivalent to 21% of GDP. These factors combined to see Southeast Asia’s best performing market for business Fundamentals retain its 5th overall rank for a third year
3. Malaysia imposed strict social restrictions early in the pandemic. Easing for certain economic activities followed from May onwards and saw manufacturing, production and sales growth turn positive in June. The recovery was uneven, however, and new restrictions were imposed as Covid-19 cases spiked again towards the end of 2020. The result is captured in Malaysia’s manufacturing PMI data, which entered contractionary territory in July 2020 and steadily declined over the five months to a November reading of 48.4.
4. The trajectory played into a third quarter GDP decline of 2.7%, when the services sector also contracted by 4%. As the Covid-19 pandemic retreats, rising global demand for the output of Malaysia’s manufacturing sector underpins optimism for 2021. Since June 2020, Malaysian manufacturers have recorded improving sentiment about the 12 months ahead, according to IHS Markit.
5. Online retail has performed well in Malaysia during the Covid-19 pandemic. According to data from E-Commerce Analytics, the Malaysian e-commerce market will grow 24.7% in 2020, recording total sales of around $7.5 billion. The market is expected to reach $12.6 billion by 2024.
6. The development of online sales in Malaysia is supported byone of Southeast Asia’s most digitally engaged populations data from 2019 shows 84.2% have internet access, a higher proportion that all other ASEAN-5 states.
7. The country also has a healthy online services ecosystem which has fostered the development of online banking and payment services in recent years. This has helped to increase the value-added by e-commerce to the Malaysian economy to around $42.5 billion in 2020, according to the Malaysia Digital Economy Corporation.
8. Leading e-commerce players Lazada and Shopee saw strong sales in 2020 as a result – Lazada’s 12.12 shopping event saw total 2019 sales exceeded in less than 12 hours in 2020, with 80% more brands and SMEs participating. Shopee recorded some 875,000 orders in the first hour of 12.12 sales.
Source:
https://www.theedgemarkets.com/article/malaysia-listed-among-top-ten-global-logistics-ranking
https://logisticsinsights.agility.com/wp-content/uploads/2021/02/Agility-Emerging-Markets-Logistics-Index.pdf
