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Asia poised to be the next top region for e-commerce

Nurdianah Md Nur | June 25, 2013
Sales from e-commerce for the region this year is projected to reach US$433 billion. Improvements in last mile logistic solutions are key to drive growth.

Asia could potentially be the next top region for e-commerce. According to eMarketer, the region is expected to garner US$433 billion worth of sales this year, surpassing last year's record of US$332 billion.

China is expected to be the primary growth driver in the region as its total revenue is projected to reach US$181 billion, up 65 percent from US$110 billion in 2012.

Given this positive outlook and the continued push by ASEAN to create a single market by 2015, several brick and mortar retailers and e-tailers are investing in building their facilities and capabilities to capitalise on e-commerce. This is especially so for businesses in Singapore, Malaysia and Thailand, where Internet connectivity is high.

The need to improve the logistics system
When consumers purchase goods online, they expect the products to be cheap and to receive them quickly. In order to meet this, businesses need to have a flexible and adaptable supply chain.

A brainstorm session on e-commerce and logistics solutions to address this was thus held last Tuesday (18 June 2013) at the Grand Copthorne Waterfront Hotel, Singapore.

The event, Retail & e-Commerce Asia 2013, was attended by 80 participants and a team of top retail veterans including CEVA logistics, Singapore Post, Estee Lauder, Toll Global Logistics and Manhattan Associates.

"With greater Internet connectivity, logistics solutions will also need to evolve with new direct-to-consumer models which will alter low-cost supply chain operations," said Paul Lim, founder of Supply Chain Asia and organiser of the event.

"This may lead to new warehouses operating 24x7 with the help of robotic labour, regional shippers flourishing with more short-distance truckload commutes, an increase in flexible delivery schedules, and even new job opportunities for managing e-commerce."

Even though e-commerce is expected to grow, one key area that will affect the acceleration of the growth is "last mile" logistics solutions.

The last mile, which refers to delivering products to consumers, is usually the bottleneck in delivery networks. It is often the most expensive part of any logistics or delivery system and requires huge investments to upgrade it.

As this is a challenge to SMEs, Lim suggests that postal and logistics providers must be enabled to enhance their service offerings. 

"Facilities such as warehouses must be upgraded and automated with advanced technologies and innovations to cater to the new service and delivery demands of today's consumers."

 "Should the last-mile logistics fail to improve hand-in-hand with the growth of the e-commerce industry, the industry will remain fragmented and service capabilities constrained - limiting its full potential."

 

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