ecommerce fulfillment and delivery in southeast asia - world mail and express conference 2015

E-commerce Fulfillment & Delivery InsightsA Southeast Asia Emerging Markets Perspective

Ray AlimurungCEO, aCommerce Philippines

Singapore | Thailand | Indonesia | Philippines PAGE 1

World Mail and Express Conference and Exhibition 21 Oct 2015 Sofitel, Manila


Agenda

• Market Landscape

• About aCommerce

• Fulfillment & Delivery Insights

• Key Takeaways

Market Landscape


SE Asia is the next e-commerce gold rushEstimated at USD 7B in 2013

Source: A.T. Kearney


SE Asia e-commerce is <1% of total retail



SE Asia e-commerce is growing fast


Estimated to grow to USD 17B by 2017 (25% CAGR)


Website Monthly Visits Website Monthly

Visits

ID 51.3m SG 4.0m

PH 42.9m ID 3.8m

TH 21.3m ID 3.8m

VN 18.5m TH 3.6m

MY 11.1m PH 3.5m

ID 11.0m ID 3.3m

TH 4.8m VN 2.7m

Source: www.similarweb.com, average Apr-Sep 2015

SE Asia is a Marketplace marketSimilar to China, marketplaces will continue to dominate for some time

About aCommerce


ASEAN e-commerce – Fragmented & confusingDemand generation Demand fulfillment

ConsultingWeb

Development

DigitalMarketing Marketplaces Customer

SupportWarehousing& Fulfillment

Shipping & Delivery

Rapidly expanding and multiplying marketplaces, flash sites, ad channels

Fragmented and rapidly evolving logistics landscape

Other marketplaces

Other flash sites


Rapidly expanding and multiplying marketplaces, flash sites, ad channels

Fragmented and rapidly evolving logistics landscape

ASEAN e-commerce – Our approachDemand generation Demand fulfillment

ConsultingWeb

Development

DigitalMarketing Marketplaces Customer

SupportWarehousing& Fulfillment

Shipping & Delivery

Other marketplaces

Other flash sites

One-stop shop e-commerce solution

Channel Management Shipping Management

Order & Fulfilment Management

Fulfillment & Delivery Insights


Availability is SACRED

Definition: Order can fulfilled and delivered within a reasonable time

• Is the item available for sale?

• Can you send the item within the customer promise?


Website must show only inventory available for sale

OutsourcedWarehouse

CompanyWarehouse

Company Store

Company Store

Company Store

CompanyWebsiteFlash/Deal Sites Marketplaces

WMS / IMS

Inventory

Inventory Orders

Orders Status

Status


Website must show only inventory available for sale

Issues typically due to:

• manual entry

• sync frequency/quality

• poor catalog/inbound/outbound practices


B2C and B2B fulfillment are very differentNeed to structure operations to optimize turnaround time

B2B B2C

Urgency

Order complexity

SKU count

Delivery complexity

Low High


B2B Warehouse = Distribution Center (DC)

Items stored in bulk in sealed cartons

High racks requiring forklift or ladder

Sorting area designed to handle bulk, high volume, low variety packages

Items picked at carton/pallet level and transported using fork/jack lifts

Li & Fung distribution center


B2C Warehouse = Fulfillment Center (FC)

Items stored individuallyor in bins

Low racks accessible without forklift or ladder

Sorting/packing stations optimized to handle many small, highly variable orders

Items picked at order level and transported using carts/trolleys

aCommerce fulfillment center

Lazada fulfillment center


Different B2C fulfillment models impact lead timesGoal is to minimize steps and variance

Storage Pick Pack Shipping Label

Deliver Model

One-stop shop

Typical courier service

Concierge courier service

Cross-dock

Pick-up + Inbound items

Pick-up + Inbound packages


Keep customers informed#1 reason for customer contact is ORDER STATUS


Order Processing After SalesLogisticsFulfillmentPlacing an Order

Capture status changes real-time; notify customers pro-actively

Search & Discovery

Order checkout

Payment verification

Orderverification Pick DispatchPack

Refund / Replace

Approve /Disapprov

e

Cancellation by merchant

Cancellation by customer Refund

Refund

Delivery

Inbound

Storage

Buying & Sourcing

Order Flow

Return


Delivery Flow

Capture status changes real-time; notify customers pro-actively

1st

AttemptFinal

Attempt2nd

AttemptDispatch

Out for Delivery Delivered

Failed AttemptCustomer unavailableCustomer unknownCustomer rejectedAddress not found

Address closedBad/incomplete address

No COD payment

Back at Hub For Re-delivery Failed Delivery /Return to Sender


Timeliness indicates ideal notification channel

Email SMSOrder confirmed ✔Payment processed ✔Payment failed ✔ ✔Order shipped ✔ ✔Order delivered ✔Order canceled [+ merchant/customer reason] ✔ ✔Delivery attempt failed ✔ ✔Return received ✔Return approved/disapproved ✔Refund processed ✔Replacement order shipped ✔ ✔Replacement order canceled [+ reason] ✔ ✔


Issue Solutions

Notify customers pro-actively

Delivery tracking is NOT sufficient

Untimely; erratic

Passive

Disconnected

Capture status changes real-time, all the time

Figure out how customers will access tracking info

CS used to fill in gaps Goal should be to prevent CS contacts


E-commerce delivery communication is more complicatedNeed to sync and automate info sharing across ALL parties

Website DeliveryService CustomerMerchant Fulfillment

Service

Website DeliveryService CustomerFulfillment

Service

Website DeliveryService CustomerMerchant

Website DeliveryService Customer

Sender DeliveryService Receiver

The best customer service is no customer service

—because the best experience happens when the

customer never has to ask for help at all.

Jeff Bezos, Founder & CEO, Amazon.com paraphrased by John Rossman in The Amazon Way


Issue Solutions

Dropdown fields at checkoutScreen address prior to delivery

Last mile delivery is challenging; solve issues systematically

Customer unavailable

Bad / incomplete address

No COD payment

Multiple delivery attempts

Multiple reminders to prepare paymentGet rid of COD

Mobile number mandatory at checkoutCustomer unreachable

Key Takeaways


Key Takeaways

• ASEAN e-commerce market is ready and growing fast

• Availability is SACRED• Show only inventory available for sale

• Structure operations for fast fulfillment

• Keep customers informed -- “The best service is no service”• Capture status changes real-time, all the time

• Notify customer pro-actively

• Sync delivery info sharing across all parties, including the customer

• Solve last mile challenges systematically

There is so much stuff yet to be invented.

There’s so much new that’s going to happen.

People don’t have any idea how impactful the Internet is going to

be and that this is still DAY 1 in such a big way.

Jeff Bezos, Founder & CEO, Amazon.com


Thank [email protected]