By Hendrik Kummeling, Managing Director, Global Accounts & Solutions, Asendia
E-commerce is essentially a logistics business, with brands striving to secure the fastest routes to their customers while keeping costs under control, and communications clear. Mastering international reach, investment in technology, smart use of real-time data, and teaming with switched-on partners will be key to this success.
Expansion into new territories via marketplaces and social commerce
Despite the fact that blockages and capacity shortages on key routes have caused chaos for companies hoping to send goods internationally, the Covid-19 pandemic has given e-commerce an additional push. Global growth of cross-border e-commerce in 2020 was 23% compared to 2019, and is expected to be 20% for 2021, according to data experts Statista.
E-commerce has seen rapid growth in many countries, e-marketer reported that in 2020 Singapore grew over 70% year-on-year, with the Philippines seeing a 33% uptick and India 28%. Other markets which are still seeing sustained growth include Thailand, Argentina, Pakistan, Malaysia, Peru, Chile and UAE. All have large, young tech-enabled populations, seeking exciting new products at great prices. Retailers are using marketplaces such as JD.com, Taoboa.com, Tmall and Shopee in Asia; eBay, Amazon, Target and Walmart in the US to grow sales. These marketplaces are an ideal way to reach new customers, with easy set-up for marketing, local currencies and payment options.
Innovative brands are also experimenting with social commerce, influencer marketing, and livestreaming shopping events to capitalise on these young audiences’ love of social interaction through their mobile devices.
At Asendia we recognise how swiftly social commerce is developing in Asia and are adapting services in the region and teaming with local partners to help Western brands gain a solid foothold through our Asian Desk solution. From our well-established Singapore base we can provide clients with a one stop shop, including marketplace management support and other digital services, beyond the core delivery and logistics services.
Extreme flexibility to meet fulfilment and cost challenges
Logistics industry analysts are not expecting ‘back to normal’ for freight capacity and prices until 2023. Out of necessity, international parcel shipping services and couriers are searching for new ways to reach overseas customers on behalf of their retail and e-commerce clients. Options considered are alternative journey routes and different modes of transport, such as road and rail freight, as a way to avoid chronic delays in sea and air transport across Europe, the US and China.
Asendia’s model for fast fulfilment of international e-commerce orders is typically based around passenger flights and the cargo element allocated by airlines. With the vast reduction on availability of these on the back of Covid, we have devised alternative options, such as air freighters and special charters, in order to keep our clients’ parcel shipping volumes on track.
What’s clear is that retailers need to work closely with knowledgeable supply chain partners to enable this level of flexibility in scheduling, if they are to retain the trust of customers in overseas markets.
Innovation with AI and automation
AI and automation are on the corporate agenda for any large retailer or brand hoping to achieve e-commerce growth and future prosperity in the coming years. From Next and Asos.com in the UK, to Zara in Spain and Decathlon in France, robotics solutions are being deployed in distribution centres, to reduce costs and increase picking efficiency and speed. Boohoo.com is investing in more warehouse automation, rather than spend on higher wages for staff, as its best option to the challenge of hiring in the right numbers.
Retailers have been using basic automation for years, but today robotic mechanisms are becoming increasingly intricate and sophisticated in what can be achieved, with more logic and mobility built into the robots. Over time costs for the hardware and software will fall, allowing this smart tech to be deployed industry-wide, where it delivers value.
Meanwhile, AI and data analytics will enable a much higher degree of supply chain transparency, from intelligent sensors for inventory tracking, to pallet-level RFID tags. Increased visibility will speed up reaction times and improve decision making.
To stay competitive, retailers will be reliant on trusted shipping partners, who are committed to finding new ways to reach distant customers, and help grow strong, reliable cross-border e-commerce businesses.