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Freight forwarding companies see opportunities in e-commerce

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The predicted growth rate of 30-50 percent per annum for e-commerce is expected to strongly facilitate the development of the logistics industry.

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E-commerce is expected to grow by 30 percent per annum

 

More than 30 percent of the Vietnamese population is expected to shift to online shopping by 2020, which means that goods delivery demand will increase significantly in the time to come, according to DHL eCommerce’s Charles Brewer.

A recent report from We Are Social showed that Vietnam had 64 million internet users in January 2018, an increase of 27 percent.

The increasingly high number of internet users, plus the rapid development of connection devices, especially smartphones and tablets, has prompted Vietnamese to do more things online, including shopping. 

According to iPrice, in 2017, the number of accesses to e-commerce websites from mobile devices increased by 19 percent, accounting for 72 percent of total accesses to the websites.

And according to Euromonitor, urban consumers and millennials, born in 1980-1998, have increasingly high demand for goods delivered within the day for online orders. Buyers now tend to be choosier and want online orders as soon as possible.

JP Wiggins, deputy logistics director of 3GTMS Software, also commented that both businesses and consumers expect goods to be delivered more quickly for smaller orders. 

Currently, the expenses of logistics of retail units in Vietnam account for 60-70 percent. Thus, using technology is indispensable to cut costs. 

Tiki, an e-commerce website, has announced the upgrading of its delivery service, committing to delivery within two hours instead of 24 hours. 

Meanwhile, DHL eCommerce has officially launched DHL Parcel Metro Same Day in HCMC and Hanoi. Customers will receive parcels within the day.

Most recently LEL Express announced a plan to cut the average delivery time by 20 percent by the end of the year.

To satisfy the increasingly high demand and number of orders, according to Nguyen Quang Trung from OPENWAY, the solution for freight & forwarding firm is to apply TMS (Transportation Management System).

Analysts all say that the freight & forwarding market is now busy, especially in the last mile delivery segment, from distribution centers to consumers.

The Vietnamese forwarding market for e-commerce has been developing rapidly. While there were only five companies in early 2000, the figure has risen to tens of firms.

Besides well-known names in the express delivery sector, the market has received newcomers, startups such as nShipS, AhaMove, giaohangso1.vn, tochanh.vn and Zozoship.vn.

Thoi Bao Kinh Te Viet Nam cited a report showing that leading forwarding firms declared a 62-200 percent growth rate in their revenue.

 

 

Source:  VietNamNet

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