The New Face of E-Commerce Logistics in the Post-Pandemic World
Logistics has become a game changer that gives companies the competitive edge
The pandemic has revealed vulnerabilities in the global supply chain and logistics. During good times, these were merely regarded as inconveniences or simply the nature of the industry which businesses and consumers have come to live with.
During the nationwide lock-down, these inconveniences eventually became an obstacle to moving essential supplies such as food and medical items across borders, with huge impact on a country’s fight against the pandemic. It was during this period of crisis that we truly began to open our eyes to the importance a digitized logistics value chain and the role it plays in ensuring the safety and stability of supply chains.
This year, when Alibaba Group launched the Green Channel initiative to drive the movement of essential supplies using Cainiao’s logistics infrastructure, it was made possible only by leveraging a global network comprising ecosystem partners and regional warehouses i.e. eHubs in Belgium, Ethiopia and Malaysia, which served as gateways into Europe, Africa and Southeast Asia respectively.
This resulted in the movement of 130 million essential goods to 150 countries and regions.
Partnerships with global non-profit organizations such as World Food Program (WFP) allowed them to tap onto a comprehensive logistics and supply chain infrastructure for their relief efforts.
As we gradually step into the post-pandemic world, we assimilate these learnings and harness them to envision how we can further develop a smart logistics industry that promises greater resilience and stability.
The New Face of Consumers
Pre-Covid-19, consumers were already venturing into the world of eCommerce, driven by the increasing internet and smartphone penetration. With digitization and globalization, consumers interact with brands more closely than ever, with a lower barrier of entry in the absence of costly shop rentals. Instant gratification thus became a key differentiator in a saturated business environment as brands strive to deliver their goods and services in the shortest time possible, while ensuring that costs remain low and competitive. This places an immense pressure on brands to not only establish greater control over their operations cost but also transparency in the entire process to offer real-time updates to consumers.
This digital shift is now accelerated as consumers fully embraced a digital lifestyle during extended period of enforced lock-downs. This is evident from Taobao’s latest 618 mid-year sale event which saw Tmall’s total GMV reaching RMB 698.2 billion. We foresee these consumer preferences and behavior to persist even after the pandemic. This has already began to play out in China, where there has been a 55 percent increase in consumers intending to permanently shift to online grocery shopping, and an increase of three to six percentage points in overall e-commerce penetration.
The continued growth of eCommerce and broadly the digital economy would demand an equally, if not more, resilient and efficient logistics and supply chain infrastructure that can only come with greater digitization of the entire value chain.
Digitization of the Global Logistics Network
With the advent of new technologies that are transforming many industries, the logistics sector is no exception. The advent of cutting-edge technology, such as Internet of Things (IoT), has helped to stitch together different components of the logistics value chain including first mile, international freight forwarding, warehousing and last mile delivery into one seamless workflow.
We are now in a new phase of revolution brought about by 5G, smart devices, cloud and edge computing where everything is connected. IoT has opened up a new dimension in the network space, connecting commerce, financing and logistics on the consumption side, with manufacturing, operations, services and decision-making on the industry side to create a two-way and real-time interactive space, providing a new level of flexibility and new possibilities for businesses.
Within the logistics industry, IoT and data analytics have facilitated greater efficiency. From smart warehouses that rely on automation, robots and electronic shipping labels to predictive technology and algorithms that map out consumer demand, future warehousing needs and facilitate smart routing in the last mile, technology has given the fragmented, high volume and labor-intensive industry a much-needed transformation.
From the merchants’ point of view, they can use these data to better predict consumer demand ahead of festivals and large sale events, and manage their production output and pre-stock warehouses using logistics platforms. The global order fulfillment from dispatch to last mile can also be handled end-to-end by the logistics platform to enjoy economies of scale without compromising on service quality, all whilst enjoying real-time shipment visibility.
Digitizing Last Mile to Win the Game
All the efficiency that merchants are chasing ultimately boils down to customer experience. The linchpin here would be the last mile delivery — it can make or break the entire shopping experience.
Consumers today are savvy and value a personal touch. Personalization in the area of last mile service simply meant the provisioning of a myriad of collection options for consumers to choose from, from post station and locker pickups to door-to-door delivery and contactless deliveries made by autonomous vehicles. Bottom line is, every consumer is unique and this uniqueness requires a customizable service that suits their needs and lifestyles.
Ultimately, consumers benefit from greater visibility, convenience and lower cost goods, that are delivered to them in the way they want it — be it to their doorstep, to the community post stations or offices, via designated delivery couriers or autonomous vehicles. This allows consumers to dictate what their shopping experience would look like right from the moment they cart out their item.
For a merchant that exports globally, last mile can be a challenge without a local team on-the-ground or sufficient in-market knowledge. But all is not lost in today’s globalized digital world as merchants can still tap on a global logistics platform that offer a full suite of service to break down trade barriers for SMEs.
Logistics as Your Ace Card
In today’s highly competitive economy, companies are facing increasing pressure to cut costs without compromising service. Here, the digitization of logistics holds the opportunity for companies to streamline operations, improve efficiency and cut costs.
As such, logistics is no longer an afterthought or a cumbersome last step for merchants to close their sales. It has become a game changer and companies that fail to keep up with logistics trends risk losing competitive advantage and falling out of favor with consumers. While the ideal scenario is to take full ownership of the logistics process to guarantee visibility and control, the reality for SMEs might look otherwise. By capitalizing on smart logistics platforms such as Cainiao Network, merchants will be able to tap on the resources of numerous established logistics firms that have a wealth of experience and technological capabilities, to deliver superior service for their consumers.