According to a growing number of studies, Asia Pacific is leading the world in smartphone usage and penetration. In fact, according to one of these studies, Singapore is the world’s top smartphone market per capita with 85% penetration, up from 72% in 2013.
Not only is adoption in this region high, but in many countries, especially in South East Asia, a high percentage of users report that mobile is the only connected device they own: In Malaysia 35% of users surveyed said a phone was their only device for going online, and in Vietnam it’s 24%.
Indeed, according to IDC, smartphone sales in Asia Pacific are projected to grow at 23.2% from 2013-2017 outpacing all other geographies and will command a 58.5% global market share by 2017. With this growth, come logistics opportunities, challenges and perhaps a rethink in managing the Asia Pacific supply chain.
Facing an increasingly Asian competitive market, Samsung, Lenovo and Apple are finding themselves competing with such companies as Xiaomi, Coolpad and Ninetology. Xiaomi and Coolpad, both based in China, have seen their market share increase in their home country with Xiaomi outselling Apple and Coolpad now the third biggest smartphone brand in terms of sales for China. These low-cost providers are now eyeing South East Asia where they are likely to come up against local favorites such as Ninetology, based in Malaysia and the country’s second biggest phone-maker behind Samsung.
As these companies expand into the South East Asian market, the majority of the smartphone manufacturing is still done in China. Coolpad, for example, utilizes an indirect subsidiary, Yulong Computer Telecommunication Scientific, based in Shenzhen China, to manufacture some of its devices whereas Xiaomi relies on such manufacturers as Foxconn and Inventec.
For logistics providers, much of the opportunity resides in transportation. Those providers that have built out their networks between China and South East Asia will perhaps benefit the most. However, as the regional market continues to develop, opportunities will expand to include advance distribution and value-added services such as repair, refurbishment and other reverse logistics services along with spare-parts solutions.
Not surprisingly, the main logistics challenges continue to be infrastructure and the willingness to outsource value-added services. Logistics providers will need to make a convincing case for these local and increasingly global companies to outsource their logistics requirements.
And as demand for smartphones rise, the potential impact they will have on the daily Asia Pacific supply chain will be immense – managing inventory, order requests, track and trace – examples of various tasks that traditionally have been done via laptop, and prior to that desktop, will migrate to mobile devices such as smartphones and tablets. Thus, setting in motion a complete rethink in how to manage the Asia Pacific supply chain.
Opportunities, challenges and perhaps a rethink of the daily Asia Pacific supply chain are all being impacted by the sales burst of smartphones and other mobile devices across the region. The possible disruption these devices bring to not only the B2C market but also to the B2B market is one that is being monitored and in fact enacted upon by forward-thinking logistics providers.