Vietnam’s logistics ecosystem is extremely fragmented, with no clear winners, but offers opportunities for players who can consolidate and roll-up existing infrastructure to achieve meaningful scale.
A&M Global Transaction Advisory Group’s latest report breaks down investment opportunities in this fast-growing, hyperlocal sector within Vietnam. Key highlights include:
- Well capitalized investors can take advantage of high demand and low supply for logistics (ports, warehouse, trucking and waterway) through consolidation and roll-up to achieve scale.
- First-mile utilization of infrastructure is very high while others remain under-utilized due to poor quality infrastructure.
Fragmented, Hyperlocal Logistics
- Hyperlocal adaptation is a must for mid-mile, as each region has different terrain characteristics and cargo flows.
- The logistics market is highly fragmented, comprising mostly micro-to-small size enterprises.
- The warehouse and transport sector is growing at a CAGR of 15.1% and will be more than US$70B by 2025.
Key Opportunity: Cold-chain Segment
- The cold-chain logistics subsegment is particularly ripe for growth due to market trends in food, pharma and retail.
- The cold-chain sector has a high barrier to entry and presents opportunities for well-capitalized investors.
- At a CAGR of 11.8%, Vietnam’s cold warehouse market is outpacing the rest of the world.
- Despite the growth, warehouses are running out of capacity during peak seasons.
- While cold warehouse capacity doubled from 2015 to 2021, there are still no dominant players in the market.
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