Volatile demand and rising logistics costs put APAC supply chains on edge

The challenges are deeply interconnected, exposing the structural fragility of supply chains across the region.

Consumer goods companies in Asia-Pacific are grappling with three interlinked challenges that are reshaping supply chains across the region: structural inefficiencies in distribution, volatile consumer demand, and mounting logistics pressures.

At the Retail Asia Summit 2025, Ashutosh Jaiswal, head - commercial digital transformation (SIMA), Coca-Cola, pointed to the enduring complexity of the region’s reliance on indirect distribution through wholesalers and distributors. 

Whilst this model extends reach into fragmented markets, it often creates misaligned incentives. Distributors serve multiple brands with competing priorities, leaving little room for alignment on shared goals. For global firms, this lack of direct control makes it harder to secure reliable data and build a truly transparent supply chain.

For companies like LEGO, where sales depend heavily on consumer “wants” rather than needs, the difficulty lies in forecasting demand. As Rohan Mathur, marketing & commercial director at CPG, explained, toys, collectibles, and merchandise tied to blockbuster films or shopping festivals can swing wildly in popularity overnight. 

A hit movie release or an event like 11.11 can trigger demand surges that traditional tools fail to capture. Meeting this challenge requires more sophisticated, AI-enabled forecasting models capable of interpreting volatile buying behavior at a micro-segmented level.

The strain is felt even more acutely by small and medium-sized enterprises. Rajbir Chopra, sales director at Sports Fashion Pte Limited, described how logistics disruptions—whether from extreme weather events like typhoons or systemic bottlenecks in shipping—can wipe out entire sales opportunities. 

A container delayed by weeks during a major sporting event can translate into losses worth tens of thousands of dollars. Adding to the pressure, logistics costs in the region have risen by about 25% since 2019, eroding already thin margins for SMEs.

Taken together, the perspectives of Jaiswal, Mathur, and Chopra illustrate a supply chain environment under sustained pressure. Structural misalignments at the distribution level limit visibility and coordination. 

Volatile consumer demand challenges traditional forecasting methods. Rising logistics costs and disruption risks squeeze smaller players the hardest. Across the board, the common denominator is clear: survival depends on greater agility, sharper use of data, and closer collaboration across the supply chain.