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            september 17, 2019

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E-commerce to drive Asian perishable market, says Panalpina


Swiss forwarding giant Panalpina expects Asia's growing middle class and growing majority of online shoppers to shape perishable demand in future.
Speaking at Fruit Logistica 2018 in Berlin, Panalpina perishables chief Colin Wells said: "We should use the pharma supply chain as a benchmark to set quality standards and share customer expectations.
"Asia Pacific's growing appetite for fresh produce will be fed by Africa, South and Central America," he said.
Mr Wells now expects growth of exports from South Africa and Kenya to China will enjoy tremendous increases - and soon, reported London's Air Cargo News.
He said the perishables industry was undergoing massive change in terms of trade flows because of changing buying habits and behaviour with rising incomes and increasing populations.
The world's appetite for fresh produce was growing, he said, owing to constantly changing consumer behaviour in Western countries and lifestyle changes in the Asia-Pacific region.
The Organisation for Economic Co-operation and Development (OECD) estimates that today, China and India account for about 15 per cent of global middle class consumption. By 2050, the organisation expects the two countries to account for more than 50 per cent.
"In addition, new markets will develop to compensate for the loss of traditional supply into western markets, for example Uganda," he said.
Another global trend that will shape the perishables industry is the changing demographics of customers, he said.
From 2020 onwards, said Mr Wells said, "digital natives" are going to be the most important consumer group in many countries, for example in the UK.
This will change the way consumers and businesses purchase perishables, with speed of delivery becoming increasingly important.
Panalpina estimates that by 2020, 20-30 per cent of all B2B purchases including perishables will be made through e-commerce.
"They grew up in an app-based environment and have lived their lives 'online', most do not even remember the times without the internet," he said.
"A new breed of B2B buyer is emerging and they expect a more consumer-like experience. They will have a major influence on how we purchase things, including perishables.
"New models for the final mile will have to be found to meet the expectations of the consumers. I also expect new virtual retailers - companies we have not even heard about yet - to emerge over the next few years," he said.
He said the industry was facing a shortage of air freight capacity from Africa.
"Recent air freight demand growth has outpaced capacity, putting pressure on low-yield cargo such as perishables," he said.
"Airlines are deploying their aircraft on trade lanes where they can expect the highest yields, and typically that is not out of Africa," he said.

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