Vietnam’s economic growth surpasses India and China, opening doors for modern logistics
A recent GDP growth statistics report states that Vietnam is the fastest growing world economy with a growth rate of 7.31% in 2019. It has surpassed the growth rate of other Asian economies including India and China, which stand at 4.5% and 6% CAGR respectively.
The primary factor contributing to this massive leap in Vietnam’s economic growth is the amount of Foreign Direct Investment coming in from investors around the world, especially the Republic of Korea, Japan, and Singapore. Almost 68% of the total FDI capital was invested in the manufacturing industry and 10.4% in real estate.
Although industries like electronics, food processing, fashion, real estate, and manufacturing dominate the Vietnamese market, tourism plays a significant role in the economy attracting nearly 6.8 million visitors yearly from different countries around the world, making Vietnam the most favorable tourist destination in South East Asia.
Another driving force behind Vietnam’s growing investment popularity is the country’s collection of free trade agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with Canada and the EU-Vietnam FTA with European countries.
However, a major challenge encountered by the region is its high logistics costs owing to under-developed transport infrastructure and inadequate logistics facilities. Higher logistics costs tend to bring down the profitability of the country’s import, export, transportation, and delivery services. This implies a higher demand for cost-effective and efficient logistics services in Vietnam.
AI-enabled solutions are optimizing the supply chains of virtually every industry to cut logistics costs and save time. Geocoding algorithms, AI-based forward and reverse logistics solutions, automated vehicle allocation, shipment sorting, etc. are some breakthrough technologies that are transforming supply chains across South East Asia and it’s about time companies in Vietnam switch to AI-driven logistics for greater efficiencies.
Locus provides intelligent logistics automation solutions and expert consulting to bring efficiency, transparency, and consistency to the supply chain.