(Dec 9): Southeast Asia's e-commerce market has undergone significant transformation over the past five years, reaching milestones earlier than expected.

The sector saw rapid growth during the pandemic, hitting US$200 billion in gross merchandise value by 2022 — three years ahead of schedule, according to Google, Temasek and Bain & Company.

Then as the pandemic eased, so did its growth. However, as the region emerges from the pandemic, the e-commerce market has shifted into a slower, more mature phase of growth.

This shift is not just affecting e-commerce platforms but also third-party logistics (3PL) providers, whose business models are closely tied to the rise and fall of the broader ecosystem.

What was once a fast-expanding space has become increasingly competitive, with logistics companies navigating a challenging environment. Pressure to lower costs is mounting, driven largely by the dominance of online marketplaces that control consumer demand and parcel allocations to 3PLs.

Such an environment fosters the rise of 3PL upstarts that, in their pursuit of growth, adopt aggressive pricing strategies, sparking a price war that we choose to avoid.

Amidst this competitive environment, the logistics industry must grapple with several critical challenges: rising costs, intense competition and the need for differentiation. The question for 3PL providers now is: How do you grow sustainably in such an environment without resorting to aggressive, unsustainable pricing tactics?

For many in the logistics industry, the response to market saturation has been to expand into adjacent sectors. This requires businesses to remain committed to their core services while seeking new opportunities for diversification.

For instance, third-party logistics providers who have built their expertise around the fast-paced nature of e-commerce are beginning to apply their experience to other sectors, such as business-to-business (B2B) restocking.

The challenge lies in how to execute this shift without losing sight of core operations. Logistics firms are now rethinking traditional models, applying tech-driven processes like real-time tracking, flexibility in delivery schedules and enhanced transparency to sectors that have historically been slower to adopt these innovations.

B2B restocking, for example, has long operated under the assumption that businesses must simply accept fixed delivery schedules and limited visibility into their supply chains. The question remains: Can these long-standing practices be improved to bring the same levels of efficiency and customer satisfaction seen in e-commerce logistics?

While diversification offers new revenue streams, it also brings significant challenges, particularly for logistics companies balancing their core e-commerce operations with the demands of sectors like B2B restocking. However, these challenges can be addressed through strategic investments in workforce development and the use of technology to streamline processes.

One solution to the complexities of B2B logistics is targeted training programmes. These can equip operational teams with the skills needed to handle the more complex regulatory requirements and paperwork associated with B2B shipments. Automating key areas of compliance and administration can further reduce the burden on employees, allowing them to focus on improving customer service and delivery efficiency.

Cultural and operational shifts are another challenge faced by logistics companies entering new sectors. Rather than reducing headcount when roles no longer align with business goals, many companies are choosing to redeploy talent into growth areas. Early engagement with employees during these transitions, along with providing opportunities for reskilling, can help preserve morale and ensure that teams are ready to support new business ventures.

Technology is also playing a pivotal role in reducing the costs of adaptability. Expanding the use of tech-driven logistics solutions such as real-time tracking and flexible delivery options, enables companies to maintain cost-effectiveness while improving transparency and flexibility for their clients. These innovations, originally developed for e-commerce, are increasingly being applied to other sectors, providing a way for logistics firms to differentiate themselves in a competitive market.

By leveraging a combination of workforce development, process automation, and technology, logistics providers can mitigate the costs associated with diversification and ensure long-term sustainability in an evolving industry.

The B2B logistics sector has traditionally lagged behind e-commerce in terms of technological innovation, but that is beginning to change.

One of the key areas for improvement is transparency. In e-commerce, real-time tracking has become standard practice, providing both consumers and businesses with the visibility they need to manage deliveries effectively.

In contrast, B2B logistics has often relied on fixed delivery schedules with limited real-time updates, leaving businesses uncertain about the status of their shipments.

Introducing real-time tracking for B2B shipments can significantly enhance operational efficiency.

By leveraging technologies originally developed for e-commerce logistics, companies in the B2B space can provide their clients with greater transparency, enabling businesses to make quicker, more informed decisions. For instance, real-time tracking allows companies to identify potential delays early and adjust their operations accordingly, minimising disruptions to supply chains.

Flexibility is crucial in modern B2B logistics, and technology plays a key role in making it possible. Traditional logistics models with rigid delivery schedules often limit inventory management.

By leveraging data-driven insights and dynamic routing, logistics providers can offer more flexible, on-demand restocking options, even for smaller shipments. This allows businesses to adapt quickly to changing demand, reducing the risks of overstocking or understocking, and improving both operational efficiency and the overall customer experience.

A great example is Ninja Van's partnership with Faber-Castell, a leading manufacturer of office and art supplies. Faber-Castell previously faced delays and inconsistent service due to rigid delivery schedules and high demand during peak periods.

To address these challenges, a daily resupply cycle was introduced, transitioning from fortnightly deliveries and allowing for better inventory management. Scalable solutions were also provided during peak seasons, along with the digitisation of operations through a dashboard that offers real-time access to inventory and shipment tracking, ultimately improving efficiency and transparency in the supply chain.

The integration of technology into B2B logistics is not just about operational efficiency but also about improving the overall customer experience. By offering greater transparency and flexibility, logistics companies can differentiate themselves in a competitive market, while helping businesses better manage their supply chains in an increasingly complex environment.

As Southeast Asia’s logistics landscape continues to evolve, the industry faces an uncertain yet promising future. The ability to adapt will likely separate the companies that succeed from those that stagnate. For logistics providers, this means not only refining their core operations but also exploring new markets and technologies to stay relevant.

The path ahead requires a delicate balance: maintaining the strengths that have driven success in e-commerce while being open to the lessons and opportunities that come from diversification.

For businesses in Southeast Asia, both large and small, the next few years will likely bring new challenges. But with those challenges come opportunities for innovation, growth and transformation—especially for those willing to pay the price of adaptability today to secure success tomorrow.

This shift toward greater transparency, flexibility, and adaptability in logistics could redefine the industry as we know it. What remains to be seen is how companies will navigate these changes, and which strategies will prove most effective in a sector undergoing rapid transformation.

Clarence Fernandez is head of B2B at Ninja Van Malaysia, a tech-enabled logistics company.