E-commerce high growth provides fertile land for logistics. (Photo: blog.paycorp.co.za) Hanoi (VNA) – Vietnam hassurpassed Thailand and Malaysia to lead Southeast Asia in terms of e-commercegrowth with an annual expansion of more than 30 percent, bringing bigopportunities for logistics companies.
The scale of e-commerce inVietnam is forecast to reach 10 billion USD in 2020, with many companies investingnot only in their sales websites and marketing but also in goods transport anddelivery service.
However, major domestic deliveryservice companies are unable to meet the need of online retail, as they simply providethe traditional logistic services without adapting them to e-commerce,according to Nguyen Quang Thuat, director of order processing at Sendo JointStock Company, an e-commerce retailer and online commerce platform.
Sendo’s latest survey showedover 40 percent of its customers complained about the time for delivery. Inaddition, delivery costs are considered to be high.
Director of Lazada Express VuDuc Thinh said logistics costs account for 30 percent of e-commerce revenue, ahigh level on the world, compared to 10-15 percent in India.
Logistics services are notkeeping pace with the boom in e-commerce, according to Thinh. For example, as onlineretailers may receive hundreds of thousands of orders a day, the hiring of “shippers”to deliver goods by motorcycle will be impossible, he said.
Thinh also pointed to a lack ofa law on logistics and cumbersome regulations. He cited as an example aregulation requiring a bill of sale for imported goods in transportation, whichis hard for on-line retailers which deal with hundreds of orders a day, withsome orders worth just several tens of thousands of dongs (several USD).
Poor connection between e-commerceand logistics sectors is a weak link of Vietnam’s e-commerce and hindersopportunities of logistics firms.
What is more worrying that thereis currently no school specializing in logistics training.
Vice Chairman of the VietnamLogistics Association Dao Trong Khoa admitted that few domestic logistic companiescan meet the requirements of their e-commerce partners.
He suggested logistics companiesto link up based on their respective strengths and available services in orderto best meet customers’ demand.
Thinh of Lazada Express urgedlogistics companies invest in technology and learn from world experience.
Pending State support andpolicies, many companies have made their own efforts to catch up with newdemands.
In anticipation of a three-foldincrease in orders this year from 2017, the Giao hang nhanh delivery companyplans to invest 2 percent of its revenues in upgrading technologies, including theintegration of the positioning application to classify orders according todestinations, thus reducing delivery time.
Director General of the companyNguyen Tran Thi said the company aims to deliver all orders in Hanoi, Da Nangand Ho Chi Minh City within 2 hours from the time of order placement, and within24 hours for customers throughout the country.
Foreign e-commerce platformsalso select local delivery partners based on whether their technologies arecompatible.
According to Fabian Wantd, CEOof Lazada Vietnam, domestic delivery companies have good understanding of the localmarket while foreign retailers are strong in technology. Therefore, Vietnamesefirms must invest in technology if they want to cooperate with foreignpartners.-VNA
VNA
