E-commerce changing the landscape of logistics industry
- POSTED: 08 Sep 2014 21:02
New players cater to eager online shoppers who want to track the progress of their packages in real time, and also help e-commerce companies that do not want to hold large inventories.
Traditional business-to-business logistics involves the shipment of orders to a centralised distribution centre, before they are delivered to the storefront. But in recent years, the e-commerce 'business-to-consumer' model has emerged, and this requires a different set of systems and mindsets.
For instance, online shoppers want to track their purchases and know their likely delivery date. To cater to these eager consumers, logistics providers are adopting a high-speed and customer-centric approach. Logistics firm aCommerce, for example, sends customers SMS shipment notifications, provides real-time delivery status updates and gives its drivers smartphones for all their deliveries.
The company also has its own call centre team to handle rescheduling if a delivery fails to reach the customer the first time. Ms Sabina Chang, CEO of aCommerce (Singapore), said: "Consumers want visibility and transparency in their delivery, and that is what I think many logistics providers can't provide today."
From webhosting to warehousing, and picking and packing, new industry players said they can provide solutions from one end of the logistics supply chain to the other, and help smaller retailers that lack sufficient resources and volume to go online.
E-commerce companies like blogshops, for example, tend to have small inventories, but most logistics companies require a minimum volume commitment.
Said Mr Vaibhav Dabhade, co-founder and CEO of Anchanto: "We need more companies that allow e-commerce companies to store and fulfil maybe a few thousand products - that would really meet the needs of smaller retailers. For small or big businesses, we give great flexibility, in that we do not charge a minimum fee, but we charge based on what they consume."
As new firms enter the market, industry watchers said the main challenge is to keep costs down while still being able to scale up. "Opening up a website, hosting a website, digital marketing - these can be scaled up quite quickly," said Mr Sachin Mittal, vice-president of equity research at DBS Bank. "But how fast can you scale up people on the ground, how fast can you scale up right deliveries in right time? That is the perennial challenge for logistics."
The e-commerce market in Singapore was estimated to be worth more than S$2 billion in 2013. It is expected to grow in line with its Asian peers, at an average annual rate of about 30 per cent over the next four years.