Vietnam’s e-commerce (e-commerce) is forecast to grow 30-50% per year, which will be an opportunity for the development of the transport service industry. What opportunities and challenges will these firms face?
“More than 30% of the population in Vietnam is forecast to switch to online shopping by 2020, which shows that the delivery demand of the e-commerce industry will increase significantly in the near future” – CEO of DHL eCommerce, said Charles Brewer.
Opportunities and challenges for carriers
According to a recent We Are Social report, the total number of Internet users in Vietnam in January 2018 was 64 million, an increase of about 27%, showing that the Internet is becoming an indispensable part of many Vietnamese people’s lives. . The increasing number of internet users and with it the rapid growth of connected devices, especially smartphones and tablets, has made Vietnamese people work more by means of online. and certainly that includes shopping. According to iPrice’s statistics, in 2017, visits to e-commerce sites from mobile devices increased on average by 19%, accounting for 72% of the total visits of e-commerce sites.
According to Mr. Nguyen Quang Trung, Director of Product Development in Asia of OPENWAY company, the development of e-commerce industry in recent years must include the role of delivery service firms. “Delivery service was more complete, faster and more punctual. Besides, good quality products, professional service attitude are important factors that make customers trust more in online shopping “- Mr. Trung said.
According to EuroMonitor, consumers in urban areas and Millennials (generation born from 1980 to 1998) have an increasing demand for immediate and same-day delivery for online orders. Consumers have been demanding more and more, they want their online orders to be delivered as soon as possible, which has been quite thoroughly applied by Amazon when delivery is only 2. day.
This is just one of the many ways that Amazon has affected the supply chain, and it’s spreading across the B2B business side of the e-commerce playground.
JP Wiggins, VP of Logistics at 3GTMS Software, said: “Both businesses and consumers are expecting faster delivery on smaller orders, and forcing shippers to use the fast order cycle. than”.
In addition, a big challenge for the carriers is determining the optimal distribution network, which is a big challenge when shippers strive to achieve a balance between service and cost. “This will be a challenge forcing businesses to find the most optimal direction. Especially small and medium enterprises because the market share pie is currently facing fierce competition from many large retailers such as Mobile World (MWG), Vien Thong A, FPT, Nguyen Kim, Aeon. , Lotte, Big C, Saigon Co.op … are also speeding up in the online retail segment ”- Mr. Trung added.
The door to shipping carriers
To be able to meet the increasing demand and order of orders, according to the Director of OPENWAY, the solution for transportation businesses is to apply a modern Transportation Management System (TMS). ).
Millennial and urban consumers have increasing demand for instant and same-day delivery for online orders.
To support this trend, TMS must be able to perform (execution) smoothly across multiple modes of transport, distribute orders to multiple destinations within a specific geographic area, and multimodal transport. . This requires a modern, multi-modal TMS, which includes bid and booking management, documentation, tracking, proof of delivery, and transport planning functions such as upload. Plan quantity of loads, consolidate loads, choose carriers and connect with carriers.
In terms of a solution that balances service and cost, businesses can achieve that balance using a multimodal TMS that can skillfully manage implementation and optimize at the high degree of automation. By choosing a TMS that can be easily integrated with a company’s multi-channel distribution plan. The system should allow shippers to gain a 360-degree view of their order processing activities so that they can display and determine exact order status from the carrier for exact location. of inventory at any given point in time, dynamically only routes the optimization ability until the moment the item actually leaves the warehouse.
The system will make reasonable decisions about the right transport method for specific shipments, from parcels to less-than-truckload (LTL – transporting goods from many different customers on a vehicle). load) or FTL (transport of moving containers or trucks full of cargo from a single customer). Streamlined, the e-commerce supply chain also improves customer satisfaction, brings new warehouse efficiency, gives shippers new delivery capabilities, and helps reduce inventory levels. inventory and lead to improved cash flow. All of these benefits directly affect shippers’ profits while ensuring that their businesses are always at the forefront of the e-commerce front.
In order to seamlessly integrate with existing systems and users, a modern TMS needs to ensure easy user access to shipping costs, service time and the visibility of bag shipments. including business users, suppliers and customers.
“Choosing for yourself a transport management solution that suits your business needs and reasonable cost is considered a top priority in the strategy of adapting to new requirements in today’s business environment” – Mr. Trung said.
* Source: Business Forum