https://asia.nikkei.com/Business/Retai ... ailer-Aeon

TOKYO -- Top Japanese retailer Aeon will offer international logistics services in Cambodia, drawn by Southeast Asia's rising trade and cross-border e-commerce as the company seeks new growth drivers.

Subsidiary Aeon Mall plans to build a roughly 30,000-sq.-meter logistics center in a special economic zone near the southern port of Sihanoukville. It aims to launch the business in fiscal 2023, offering import storage, customs clearance and support for cross-border online retail.

Cambodia -- part of the Regional Comprehensive Economic Partnership, the world's largest trade bloc -- has plans to develop part of the economic zone as a free trade port, with backing from the Japanese government and the Japan International Cooperation Agency.

The center will feature Cambodia's first bonded warehouse, which lets importers store products from abroad without paying duties before they go through customs procedures. Companies can leave large quantities of goods there for a certain period of time, gradually withdrawing them as needed and paying any applicable tariffs at that time.

Demand for such facilities is growing worldwide as a way to raise supply chain efficiency and manage costs.

A local unit of Aeon Mall will create a new company for the venture in the first half of 2022.

Aeon Mall, which operates two shopping centers in Cambodia, looks to have mall tenants use the bonded warehouse to store imports from Japan, Europe, the U.S. and elsewhere. It also will market its services to local retailers and e-commerce companies, along with Japanese consumer products makers looking to sell in Cambodia, and anticipates appliance and auto manufacturers will store parts at the facility.

Overseas business is central to the growth strategy for Aeon, Japan's biggest retail group by sales. Its medium-term plan through 2025 targets over 100 billion yen ($860 million) in operating profit in Asia outside Japan, more than twice as much as in fiscal 2019.

Beyond its plans to add shopping centers in Southeast Asia, the company is rushing to diversify operations there, eyeing fields including supermarkets and consumer finance.

The international logistics venture is part of Aeon's plan to cultivate new profit sources. The company expects to generate steady profits from the business once it accumulates more know-how and builds a customer base.

Cambodia's imports rose to $19.13 billion in 2020 from $6.79 billion in 2010. Further growth is anticipated under the RCEP trade pact, which took effect there Jan. 1.

The region's international e-commerce market also looks poised to expand. Sea, Southeast Asia's largest e-commerce company, and Alibaba Group Holdings have made Cambodia a focus in recent years, and big Japanese players are offering services there.

Once Aeon Mall establishes the international logistics business in Cambodia, it will look to expand to countries such as Indonesia and Malaysia.

I realize that it was reported last year.

But as it near completion, it’s being reported as news in Japan.

Japan is mainland China’s biggest rival in Southeast Asian development.

But much different approaches.

Mainland China develops projects that helps China first and foremost. Superhighway from China city to the capitol. Japan creates drainage systems for Phnom Penh, which helps everyone first.

Chinese loans interest rates are officially 5% (unofficially much more), so they expect defaults and eventual infrastructure possession. Japanese loans interest rates are 0.05% or less.

Two different soft power approaches.