Explosive e-commerce growth drives demand for logistics

Việt Nam has seen rapid growth in e-commerce in recent years, and demand for logistics services is growing commensurately. — Photo courtesy of J&T Express

The rapid growth in e-commerce is driving an unprecedented increase in demand for logistics services, including express delivery services, according to industry insiders.

In its E-commerce White Book 2021, the Việt Nam E-Commerce and Digital Economy Agency said Việt Nam has the highest number of people shopping on e-commerce platforms in the Southeast Asia region at some 49.3 million.

In the last two years, the country has seen both consumers and firms moving online, it said.

Nguyễn Ngọc Dũng, president of the Vietnam E-commerce Association, said there has been a boom in e-commerce since the pandemic began.

More than 70 per cent of the population have access to the internet and nearly 50 per cent shop online, he said.

The online shopping boom has offered opportunities as well as challenges to the logistics industry, which has to meet the surging demand for order fulfilment and last-mile delivery, he said.

Delivery speed is a major factor affecting customer satisfaction and retention in the fiercely competitive online market, and so online shops that provide quality products and fast delivery gain an advantage.

There is also increased demand for transportation of specific or imported goods, especially cross-border express delivery, according to logistics firms.

New consumer trends and the e-commerce boom require express delivery, shipping and forwarding firms to make adjustments to their business models and strategies, they said.

Many have launched specialised services to meet the demands of various groups of customers and embraced digital transformation to improve service quality and increase customer satisfaction.

Delivery companies said the traffic infrastructure does not guarantee the desired traffic speed, with the frequent congestion in both cities and on inter-provincial roads making it difficult for them.

This has no immediate solution and so firms seek ways to optimise order processing time, they said.

Most online sellers require a last-mile delivery solution, and this has stimulated growth, especially for express delivery services, they said.

In the last few years, delivery firms have actively linked up with third parties to offer integrated service packages and solutions to optimise sellers’ operations and better meet customers’ demand.

J&T Express has, for instance, signed agreements with Pancake, Upos, Haravan, and Kiot Viet to enable sellers to track the entire shipping process and goods quality in each stage, and control the flow of goods in and out of the warehouse.

Phan Bình, its brand director, said the competitive challenge in today's constantly changing market is both a source of pressure and a driving force for express delivery businesses to improve themselves.

His company has stepped up investment in transit centres and the use of technology solutions in its management and operations.

Owning a network of 36 modern transit centres helps his company ensure the circulation and transport of goods to consumers quickly and accurately, he said.

It has the ‘Track and Trace’ technology system which allows customers to update the status of goods, their order information or contact the carrier directly, he said.

Mobile applications and websites also make the delivery of goods easier, faster and more efficient, he added. — VNS