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2022

Indonesia Cold Chain Logistics Market

Indonesia Cold Chain Logistics Market Size, Share, Competitive Landscape and Trend Analysis Report by Business Type (Cold Storage and Cold Chain Transport), End-Use Industry (Fruits & Vegetables, Bakery & Confectionary, Dairy & Frozen Desserts, Meat, Fish, & Seafood, Drugs & Pharmaceuticals and Others), Product (Refrigerators and Air Conditioning) and Technology (air blown and EUTECTIC): Indonesia Opportunity Analysis and Industry Forecast, 2021-2031

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Author's: Himanshu Joshi | Lalit Janardhan Katare
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The Indonesia cold chain logistics market was valued at $4.97 billion in 2021, and is projected to reach $12.59 billion in 2031, registering a CAGR of 10.2%.  

A cold chain is a combination of temperature-controlled surface transport and supply chain. Cold chain logistics refers to the freezing solutions required to maintain the quality and shelf life of products such as fresh agricultural produce, seafood, frozen food, photographic film, chemicals, and pharmaceutical drugs. The cold chain logistics process involves the utilization of temperature-controlled warehouses for storage and cold insulated transport vehicles for product distribution. Cold chain logistics solutions are widely used to transport and store fruits, vegetables, meat, beef, medicines, and drugs. Transportation modes used are refrigerated trucks, refrigerated railcars, refrigerated cargo, and air cargo. The cold chain industry plays an important role in reducing the wastage of perishable products and commodities, thus providing remunerative prices to farmers. In the pharmacy industry, cold chain logistics increases the efficacy of the drug throughout the supply chain.

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Growing e-commerce industry in Indonesia due to the rising penetration of digitalization increase the demand for cold chain logistics in the country. In addition, the increased number of refrigerated warehouses in the country propel the market growth during the forecast period. Furthermore, the rapid growth of the processed food sector owing to the increased consumption of food & beverage, and meat products drive the growth of the cold chain logistics market in Indonesia during the forecast period. Whereas, a lack of standardization and high operational costs for cold chain logistics hamper the growth of the market in the country. Moreover, the adoption of technologies and supportive government initiatives in Indonesia are expected to offer lucrative opportunities for market players during the forecast period.

The Indonesia cold chain logistics market is segmented on the basis of business type, end-use industry, product, technology. By business type, it is bifurcated into cold storage and cold chain transport. Depending on the end-use industry, the market is categorized into fruits & vegetables; bakery & confectionary; dairy & frozen desserts; meat, fish, & seafood; drugs & pharmaceuticals; and others. On the basis of product, it is classified into refrigerators and air conditioning. By technology, it is segregated into air blown and EUTECTIC.

The key players operating in the Indonesia cold chain logistics market are Dua Putera Perkasa Pratama, GAC, Kiat Ananda Group, Kuenhe + Nagel, Maersk, OOCL Logistics Limited, PT. MEGA INTERNATIONAL SEJAHTERA, SF Express, United Parcel Service (UPS), and Wahana Coldstorage Indonesia.

The rapid growth of the e-commerce industry

In the current scenario, the E-commerce industry is growing rapidly due to the rise in penetration of the internet. People can buy and sell everything such as food products, electronics, clothing, pharmaceuticals, and other products, virtually with the help of the internet, which is anticipated to increase the demand for cold chain logistics in the country. For instance, in September 2021, the International Trade Association (ITA) announced that in 2020, Indonesia also had one of the highest rates of e-commerce adoption in the world. About 90% of internet users in the country aged 16 to 64 have purchased products and services online.

Also, International Trade Administration (ITA) mentioned Indonesia's e-commerce market was worth more than $30 billion in gross market value (GMV) in 2020 and is anticipated to expand to $83 billion by 2025, which is driven by changing behavior among tech-savvy customers willing to pay more for convenience. Despite rise in competition, much of Indonesia's e-commerce potential remains untapped, particularly in cities outside Java. Moreover, online grocers drive the demand for cold storage. For instance, in April 2022, the Fresh Factory built 15 micro refrigerated warehouses across Greater Jakarta, Java, and Bali. Every warehouse is 8 km away from each other; thus, increasing the efficiency of the procurement process. In addition, the Ministry of Marine Affairs and Fisheries of The Republic of Indonesia announced that Indonesia is the world’s largest archipelagic country and it has more than 8,500 varieties of fish. Indonesia produces more than 66% of global tropic seaweed.

Also, the marine industry in Indonesia generated approximately $5 billion every year. Thus, huge production and supply of seafood in Indonesia increases the demand for cold chain logistics in Indonesia during the forecast period. Furthermore, increase in penetration of the internet throughout the world supports the growth of the e-commerce industry. Due to the availability of all products in smartphones, consumers can buy anything from everywhere. For instance, ITA announced that there were more than 202.6 million internet users of over 270 million people in Indonesia in January 2021. Mobile devices are the main resources with which Indonesians complete the shopping on e-commerce platforms. Some online e-commerce platforms report that about 75% of the online shoppers shopped on their mobile devices instead of desktop computers. Thus, the growing e-commerce sector in Indonesia supports the growth of the cold chain logistics market in the country during the forecast period.

Increase in refrigerated warehouses

Dozens of warehouses comprising cold chain systems are designed to ensure the ideal storage and transportation conditions for temperature-sensitive products. Multiple export industries are dependent on the vital links that the cold chain solution systems provide. Businesses invest millions of dollars in their cold chain operations to create effective, efficient, and reliable processes because end-to-end cold chain security is the weak link in the system. Single breakdown in the cold chain logistics chain can lead to catastrophic losses of products and capital. For instance, in September 2021, Pasarnow e-commerce company raised funding worth $3.3 million for the up-gradation of its fragmented and inefficient supply chain which includes temperature-controlled warehouses and others that increase the productivity of the company. Thus, an increase in refrigerated warehouses is expected to fuel the growth of the cold chain logistics market in Indonesia during the forecast period.

Indonesia Cold Chain Logistics Market
By Business Type
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Cold Chain Transport is projected as the most lucrative segments

Lack of standardization

Lack of standards related to storage temperature, security, operating procedures, and others pose significant challenges to the cold chain industry, where the quality and flexibility of available cold warehousing space is a major concern. In many cases, companies have to invest further to upgrade the space and their specifications to support cold chain logistics and related operations. In addition, upgrading the facility in terms of temperature compliance or accommodating automated equipment serve as major challenges. For instance, in 2020, according to data from the Ministry of Maritime Affairs and Fisheries, the production of fisheries in Indonesia is increasing year by year which comes with many opportunities as well as challenges such as fish losses due to the unavailability of plants, cold storage and other things in the ports. As a result, the companies face many losses, and here they need cold storage at ports. Therefore, a lack of standardization in cold chain logistics is anticipated to hamper the growth of the Indonesia cold chain logistics industry during the forecast period.

Indonesia Cold Chain Logistics Market
By End-use Industry
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Others is projected as the most lucrative segments

Adoption of technologies by the Indonesian cold chain logistics industry

The adoption of Radio Frequency Identification (RFID), electronic data exchange (EDI), blockchain, and other technology improves efficiency and provides the flow of temperature-sensitive/perishable goods along the supply chain. RFID technology is used to identify items through a unique electronic product code (EPC) or other barcode and to store real-time environmental data (including temperature), which can later be transmitted, allowing corrective actions to be taken before products are irrevocably damaged. Furthermore, Internet of Things (IoT) helps in cold chain management by providing sophisticated temperature tracking and monitoring solutions.

Indonesia Cold Chain Logistics Market
By Product
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Air Conditioning is projected as the most lucrative segments

It involves controlling and monitoring a product’s flow from the procurement of raw materials to the distribution of the final product. In addition, IoT provides live data that allows unmatched visibility into every process and transaction within the cold chain logistics. For instance, in 2022, Fresh Factory- a cold-chain logistics company in Indonesia adopted a warehouse management system (WMS) that tracks the goods precisely when products are entered and left. In addition, it also uses a fulfillment management system (FMS) that provides inventory-related information such as how much quantity is left at each point of sale. Therefore, the adoption of technologies by cold chain logistics companies in Indonesia is expected to offer lucrative opportunities for the Indonesia cold chain logistics industry players during the forecast period.

Indonesia Cold Chain Logistics Market
By Technology
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Air Blown is projected as the most lucrative segments

COVID-19 Impact Analysis

  • The COVID-19 impact on the cold chain logistics market is unpredictable, and is expected to remain in force for a few years.
  • The COVID-19 outbreak forced government In Indonesia to implement stringent lockdown and ban import–export of products and items for most of 2020 & few months in 2021. This led to sudden fall in the demand for frozen products.
  • Moreover, nationwide lockdown forced cold chain logistics facilities to partially or completely shut their operations.
  • Adverse impacts of the COVID-19 pandemic resulted in delays in activities and initiatives regarding development of Cold Chain Logistics systems in Indonesia.

Key Benefits For Stakeholders

  • This study presents analytical depiction of the Indonesia cold chain logistics market analysis along with the current trends and future estimations to depict imminent investment pockets.
  • The overall market opportunity is determined by understanding profitable trends to gain a stronger foothold.
  • The report presents information related to key drivers, restraints, and opportunities of the Indonesia cold chain logistics market with a detailed impact analysis.
  • The current cold chain logistics market is quantitatively analyzed from 2021 to 2031 to benchmark the financial competency.
  • Porter’s five forces analysis illustrates the potency of buyers and suppliers in the industry.

Indonesia Cold Chain Logistics Market Report Highlights

Aspects Details
Indonesia Cold Chain Logistics Market By Business Type
By Business Type
  • Cold Storage
  • Cold Chain Transport
Indonesia Cold Chain Logistics Market By End-Use Industry
By End-Use Industry
  • Fruits & Vegetables
  • Bakery & Confectionery
  • Dairy & Frozen Desserts
  • Meat, Fish, & Sea Food
  • Drugs & Pharmaceuticals
  • Others
Indonesia Cold Chain Logistics Market By Product
By Product
  • Refrigerators
  • Air Conditioning
Indonesia Cold Chain Logistics Market By Technology
By Technology
  • Air Blown
  • EUTECTIC
Indonesia Cold Chain Logistics Market By KEY PLAYERS
By KEY PLAYERS
  • Dua Putera Perkasa Pratama
  • GAC
  • Kiat Ananda Group
  • Kuenhe + Nagel
  • Maersk
  • OOCL Logistics Limited
  • PT. Mega International Sejahtera
  • SF Express
  • United Parcel Service
  • Wahana Coldstorage Indonesia
Key Market Players
Key Market Players

Conestoga Cold Storage, Swire Group, Lineage Logistics, Burris Logistics, Americold Logistics, Congebec Logistics, Inc., AGRO Merchants Group, LLC, VersaCold Logistics Services, Nichirei Logistics Group Inc., Preferred Freezer Services

Analyst Review

the Indonesia cold chain logistics market is expected to grow at a remarkable rate in the near future, owing to an increase in the number of refrigerated warehouses and the growth of the processed food sector in the country. Cold chain logistics consists of the storage and transportation of temperature-sensitive products along the supply chain by using thermal refrigerated packaging methods and logistical planning so that the integrity of these shipments is protected. This is attributed to increased demand for healthy and consumable goods among customers.

The Indonesia cold chain logistics market is a fairly fragmented market in which several market participants are operating in the region. Numerous developments have been carried out by top companies, such as Dua Putera Perkasa Pratama, GAC, Kiat Ananda Group, Kuenhe + Nagel, and Wahana Coldstorage, over the years. This supplements the growth of the Indonesia cold chain logistics market. The impacts of COVID-19 significantly affected the Indonesia cold chain logistics market in 2020. Furthermore, the market witnessed negative growth or a significant downfall in 2020

Author Name(s) : Himanshu Joshi | Lalit Janardhan Katare

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Indonesia Cold Chain Logistics Market