China may be the most dominant driver of manufacturing in the world but the significant growth of a number of Asian economies presents a big opportunity for Intra-Asia trade.
The Intra-Asia trade region stretches north to Korea and Japan, east to the Philippines, south to Indonesia, west to Myanmar and also includes South Asia. Home to some of the largest and fastest-growing economies in the world, Intra-Asia trade has grown in strength because of its high level of manufacturing activity of goods for export and quickly growing middle classes that demand finished products from abroad. As a result, trade between the countries within Asia has boomed in the past two years with each country now becoming huge consumer markets.
The steady growth of the Intra-Asia trade owes much to the development of regional economies such as Vietnam, Cambodia, Philippines and Indonesia, alongside the earlier (and continuing) economic growth stories of Malaysia and Thailand. Vietnam, in particular, is the latest success story with the economy producing double-digit growth rates in recent years, partly due to some shifting of production out of China. The production of garments, shoes, electronics, food and beverages and construction materials along with the new addition of e-commerce, have been driving this.
The big opportunity
It is due to the rise in manufacturing growth that is fuelling the growth of Intra-Asia trade and along with it, expanding the overall Asian cargo market. Trade in Asia as a whole is expected to grow by an average 6.3{1b1b9ce846acca1f39def03dae003274ac5660c9b015842d7bf5d85a3bcad6d8} per year on the assumption that trade momentum holds[1]. The close proximity, fast-growing economies and manufacturing bases means the outlook for intra-Asia trade is particularly rosy.
At PFE we are beginning to see an increase in the number of our customers taking advantage of this growth and trading directly with countries within the Intra-Asia region. We expect that this trend will grow as the consumer markets in this region continue to develop.
Not only does Intra Asia represent a potential new consumer market but it can also be used as a hub for serving other global markets. Malaysia’s central location makes it a perfect distribution hub offering reduced transit times to get stock into consumer markets. It also provides scope for combining commodities produced in different countries, reducing incidents of over ordering for one particular country and having dead stock.
How PFE can help
If you want to begin exporting your products within Asian countries, PFE offers Sea Freight services within the whole of the Intra-Asian region. Our extensive network of trusted partners in the area enables us to offer highly competitive supply chains and control them on your behalf.
We offer good transit times from all key loading ports including Hong Kong, Shenzhen, Ningbo, Xiamen and Shanghai to the following destination ports:
- Bangkok (Thailand)
- Sihanoukville (Cambodia)
- Ho Chi Minh City (Vietnam)
- Manila (Philippines)
- Port Klang (Malaysia)
- Singapore (Singapore)
- Jakarta (Indonesia)
We also work closely with our partner in Malaysia to utilise the distribution hub in Port Klang in order to manage distribution within in the region and react to market changes on behalf of our customers.
Whether your business imports clothing, textiles, footwear or furniture, Intra-Asia trade is worth consideration. If you would like a non-committal quote for shipments within Asia, please get in touch.
[1] Source: OECD 2018. https://www.oecd.org/dev/SAEO2018_Preliminary_version.pdf
