Strategy

The rise of e-commerce in Asia Pacific

By Katie Kinraid, General Manager APAC, BluJay Solutions

The estimated value of the global e-commerce market for consumer goods has grown by 16% over the past year, with a total annual spend in 2017 reaching almost US$1.5 trillion (1).

In Asia Pacific, the B2C e-commerce market is projected to grow to US$1.6 trillion (2) in 2021, with this region leading the global mobile commerce adoption.

In the last 12 months, we saw the arrival of e-commerce giant Amazon in Asia, as well as Alibaba doubling its investment to US$4 billion in the Singapore-headquartered regional e-commerce firm Lazada Group, as it rivals Amazon in its move to expand aggressively in the region.

With that, it is hardly surprising that the logistics industry is sharpening its offering and launching services specifically aimed at meeting the fast-changing needs of the multichannel retail market.

Carriers are offering faster delivery timescales and more and more choices for premium (e.g. same day) services on parcel shipping, and are rolling out increasingly sophisticated tracking services, via dedicated web portals, along with partner and increasingly consumer-focused apps for easy booking and tracking.

For instance, Australia Post and national Australian transport and logistics company, StarTrack have transformed its delivery services by introducing high-tech innovations to ensure that customers are connected globally.

Last year, Singapore rolled out its first Smart Post Office that is supported by a self-service area that has 24/7 access, with the aim to offer every customer greater flexibility and efficiency.

The mobile revolution

When it comes to e-commerce, consumers’ shopping habits centres very much around mobile. Specifically in emerging markets across Southeast Asia, mobile-commerce is rising rapidly.

According to a Twitter research, consumers are browsing more on mobile devices and are moving away from in-store payment to mobile payments. It was also noted that two in three Twitter users in Asia browse on mobile devices and make mobile payments (3).

This growth in mobile usage and internet access, coupled with the emergence of a more affluent middle class in emerging markets (4) have translated into booming sales for e-commerce in Southeast Asia.

Indonesia for instance, is the single largest B2C e-commerce market in the region where it contributed to over a third of the Southeast Asia e-commerce market (in terms of Gross Merchandise Value) (5).

Driving change in supply chain and logistics

Logistics service providers (LSPs) are adapting to the changes as well.

In Warehousing, process adjustments are increasingly influenced by e-commerce and the need for flexibility to fulfil customer demand for choice in terms of product and delivery timescale and location.

With value-added logistics becoming increasingly common, goods may move from one area of the warehouse to the other, via labelling or packaging, and may not even go through the retailer who sold the goods if the orders are fulfilled via direct despatch.

Retailers and logistics service providers are working more closely than ever before to keep up with the increasing demands of the multichannel consumer.

As e-commerce becomes increasingly international and consumers becoming ever more demanding, the retail supply chain will undoubtedly need to carry on changing to keep up.

While the potential of emerging markets should never be underestimated within the e-commerce sector, infrastructure capabilities in these economies still present some challenges for them to maintain the same level of service and delivery experience for their customers.

The key to e-commerce is speed of fulfilment, which cannot be sustained without effective supply chain collaboration.

From the exchange of data and documentation with customers and immediate supply chain partners, to communication between supply chain partners with no direct link who may at times be competitors, the chain needs to remain unbroken.

In other words, it is about localising the e-commerce experience for each market – be it through local languages, currencies, delivery or return processes and options.

A company based in Australia for instance, should ensure that their customers in another country – regardless of the cultural or in-market infrastructural differences – gets the same quality experience as compared to someone based locally.

Collaboration has never been so important, and companies should find local, safe, trustworthy partnerships to achieve this goal.

Sources

  1. https://wearesocial.com/blog/2018/01/global-digital-report-2018
  2. https://sbr.com.sg/retail/asia/asia-e-commerce-market-projected-grow-us16t-in-2021
  3. https://marketing.twitter.com/apac/en_gb/insights/m-commerce-takes-off-globally-more-acutely-among-twitter-users.html
  4. https://www.bennelongfunds.com/insights/251/global-matters-the-emerging-middle#.WyCx-FOFNTY
  5. https://ww2.frost.com/news/press-releases/southeast-asia-b2c-e-commerce-market-expands-285-q4-2017-gross-merchandise-value-over-us6-billion-finds-frost-sullivan/
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