How Express Delivery Services Can Become a Key Differentiator for E-Commerce Businesses
By: Ricky Xue, General Manager of Southeast Asia, Cainiao Network
*Published in e27.co*
Over the past few years, we witnessed significant evolution in the express delivery market alongside the global eCommerce boom. In Asia Pacific where more than 60 percent of eCommerce activities take place, the market continues to grow at a rapid pace due to international trade and rising disposable incomes — the courier, express, and parcel (CEP) market is currently valued at USD 185.2 billion this year and is forecasted to grow at 6 percent annually until 2028.
More than 90 percent of businesses in the region are micro, small and medium-sized enterprises (MSMEs). To capture overseas market opportunities, MSMEs that have tapped on digital platforms face the daunting task of navigating complex business, inventory, logistics fulfillment and supply chain needs with the limited resources they possess.
This is further interlaced with challenges such as rising customer expectations pertaining to delivery speed, convenience, and flexibility as omnichannel retail platforms increasingly become the default. Express delivery services today are no longer a bonus feature, but an expectation. This means that in order to meet customer expectations, a reliable logistics partner is crucial for optimizing current processes and reducing operating costs.
The delicate balance between time and cost
Customers today demand faster and more affordable delivery options. In addition, they also expect transparency throughout the delivery process, with real-time updates on their shipments. Logistics operators are thus under pressure to fulfill these rising consumer expectations by being adaptable and agile, all while trying to maintain cost competitiveness.
However, as MSMEs themselves do not possess comprehensive global logistics infrastructure that is necessary to optimize efficiency, it is crucial for them to outsource these business needs to achieve maximum time- and cost-effectiveness. This is where third-party logistics operators can serve as centralized platform partners to empower MSMEs with a holistic cross-border logistics solution, and strike a perfect balance between efficiency and cost.
Even as more options become available to consumers, they continue to seek convenience, affordability, and efficiency with express delivery options. They expect merchants and MSMEs to provide more personalized services and naturally gravitate towards reliable delivery providers when given a choice. To retain leadership position and establish competitive edge, logistics operators need to constantly explore new opportunities to expand shipping freight network and set up regional air and logistics hubs in order to streamline goods flow and boost connectivity within markets.
Investments in smart logistics will pay off
With the rise in eCommerce offerings and supply chain capabilities, MSMEs are investing in infrastructure and service offerings that can support time-definite delivery services for cross-border eCommerce. This includes smart warehouses, improved transportation networks, and the use of cutting-edge technologies such as autonomous vehicles. Beyond that, socially responsible businesses have also started looking at the use of electric vehicles and renewable energy sources to increase sustainability efforts in order to reduce carbon emissions and costs over time.
The digital push and consumers’ increasing digital savviness have also prompted businesses and logistics operators to digitalize legacy equipment, so they can better cope with the surge in demand during peak seasons such as major shopping festivals and holidays. This includes integrating new technologies into existing platforms to enhance transparency across the supply chain, allowing businesses and logistics operators to pre-empt and resolve any major issues ahead of time. One such example is Cainiao’s radio-frequency identification (RFID) tags that are attached to every parcel, which provides real-time updates on the parcel’s location, with improvements in identification sensitivities. This greatly improves MSMEs’ overall visibility and efficiencies in the areas of inventory and supply chain management.
Evolution is crucial for growth
The spotlight on express delivery services continues to grow, presenting significant opportunities for MSMEs and logistics operators alike. By strategically engaging and partnering with logistics operators and platforms, MSMEs can level with larger counterparts in the global marketplace and meet consumers’ expectations for time-definite deliveries. Increasingly, eCommerce has become crucial to the growth of the digital economy, and express deliveries a key element for small businesses to elevate customer experiences and deliver exceptional services.
To thrive and stand out in a competitive landscape, businesses must embrace a more diverse and agile business model. This entails redefining their operations through strategic partnerships, and demonstrating flexibility and transparency in delivery services. The business climate today, which favors partnerships and technology adoption, has widened growth opportunities for small businesses in a globalized marketplace that once seemed beyond reach.