The reason why Keppel Logistics, a wholly-owned unit of Keppel Telecommunications & Transportation – embarked on a $4.6 million acquisition of a majority stake in e-commerce logistics company, Courex in October was because as per its Chief Executive Officer, Desmond Gay, the company feels staying in touch with the fast-changing sector is a key strategy for future growth.
Interacting with media, Mr Gay shared, “We are constantly striving to innovate and evolve and the Courex acquisition has allowed us to structure ourselves in a way that we become more relevant to the market and the new economy. It is just the first step of things to come.”
Courex is a third-party logistics service provider that supports the needs of retailers, from last-mile delivery to international shipping and warehousing. It counts Singapore Airlines and Hachi.Tech among its clients.
Keppel Logistics holds a 59.6 per cent stake in Courex, while the remaining 40.4 per cent is held by founder Joe Chua, who continues to lead the company.
As per Mr Gay, the acquisition came as a ‘natural progression’ for Keppel Logistics, as it moved to expand from its traditional B2B business into the B2C space, or the e-commerce market.
Mr Gay said, “As companies, including our customers, begin to re-look and evolve their supply chains against the backdrop of an e-commerce dominated landscape, we likewise have to adapt and grow new muscle, and develop new capabilities and competencies.”
Incorporating Courex’s capabilities into Keppel Logistics’ business also allows the firm to better cater to its customers. This is a key event, as more brick-and-mortar retailers turn to online platforms to complement their sales channels.
It should be closely noted that the growth prospects for e-commerce in South-east Asia are significant and ever emerging.
Mr Gay said, “Being in the middle of a region like South-east Asia, with more than 600 million people, we surely have a huge market opportunity. With the acquisition, we’re only just starting, and we’re ready to have a bite of the e-commerce pie.”
Mr Gay expects Keppel Logistics, which has a presence in Australia, China, Indonesia, Malaysia, Singapore and Vietnam, to grow its e-commerce logistics business by at least 15 per cent in annual revenue over the next few years.
Mr Gay referred Indonesia and Vietnam as ‘bright spots’, noting that Indonesia, in particular, is expected to make up over half the South-east Asian e-commerce market by 2025. The firm will explore opportunities to enter new markets such as Thailand, Philippines and Myanmar.
He further added, “A market that is US$88 billion and possibly US$128 billion is big enough, I think, for the various players. If you look at South-east Asia, it’s still very fragmented. This means you have specialists that provide only last-mile services, for example, or parts of the supply chain, but not quite the entire supply chain. Our synergies with Courex will also help us move towards being an omni-channel logistics service provider, while retaining our core strengths in providing best-in-class third-party logistics solutions.”