Mastering Ecommerce Logistics in SEAsia
In many parts of Southeast Asia getting a product from your warehouse to your customers remains a challenge
But if your company is to succeed you’d better figure it out because Southeast Asian consumers go to ecommerce retailers 41 times for every single visit to brick-and-mortar stores, according to a report from financial services company UBS.
Companies must deal with weak or patchy infrastructure and postal networks that may be slow or unreliable, not to mention the head-spinning traffic that clogs cities like Jakarta, Manila and Bangkok. Local logistics firms may not be used to shipping lots of small packages, either.
Shaky Shipping Infrastructure a Challenge for Ecommerce
But logistics demands will only continue to rise as cross-border e-commerce heats up with the advent of the ASEAN Economic Community. By 2030, Asia’s economy may be larger than that of the United States and the European Union combined, according to a report. SEAsia will continue to make and consume more products, with a lot of those products purchased through e-commerce.
Companies Must Invest
That means that companies must put some money into upgrading their logistics systems.
“Investing in the technology or partners to seamlessly distribute products will be a core differentiator for brand success in 2015,” Paul Srivorakul, group CEO of aCommerce and executive chairman at Ardent Capital, told Tech in Asia.
Or, as online retail giant Lazada said in a recent job posting for a logistics executive:
“The goal is to deliver on our exploding growth, continuously improve customer experience and build a scalable and sustainable e-commerce infrastructure.”
Helping to smooth the path is e-commerce-friendly AEC legislation. Part of the plan is “liberalisation to encourage a more competitive logistics industry,” according to the UBS report.
There’s an app for that
Big logistics firms will no doubt continue to try to expand their networks. Some companies, like Lazada, are investing in their own fleets.
Others are looking to innovate with Uber-like solutions that will provide small-scale, on-demand shipping for the so-called “last-mile” problem: Getting a product from a transit hub — like a port — through a congested city or undeveloped countryside and to a customer’s door.
For example, the apps Lalamove and Gogovan allow you to hire vans and trucks. Others say that existing driver networks like Uber, GrabTaxi and EasyTaxi can be commandeered for deliveries when the drivers aren’t driving people around.
The key for retailers is connecting their front-end systems with their back-end fulfilment operations so they can ensure a seamless experience for the consumer
supply chain executive Scott Gillies told Ichainnel
You need to Shape up and Ship out:
- Carefully consider your company’s current and future needs
- Consider a mix of solutions