Logistics market welcomed ecommerce wave

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Logistics market welcomed ecommerce wave

Results from the 2015 survey by the Vietnam Supply Chain Logistics conducted with 100 representatives from the logistics department of enterprises (companies) operating in Vietnam showed that the majority of businesses have logistics costs / revenue accounts for between 5% to over 10%. This is one of the potential sectors but sadly not in the hands of domestic enterprises.

Market fragmentation

According to the Center for Trade Promotion and Investment, the Ministry of Industry and Trade, now, in Vietnam there are over 1,200 companies providing logistics services, mainly concentrated in HCMC and Hanoi. Among them, about 900 businesses that transport agents (70% are small and medium enterprises).

There are 25 multinational logistics enterprises operating in Vietnam, but this company holds 70-80% market share of the industry.

The logistics service provider businesses of Vietnam primarily as agents, or undertake each stage as subcontractors in logistics for logistics service providers abroad.

Vietnam logistics market is considered still a lot of potential with growth rates reaching 16-20% / year. However, the competitiveness of the logistics industry is low, the cost is still high.

A special feature is a transportation logistics market in Vietnam is more fragmented, with 92% / 700,000 registered truck transportation business belongs to the individual car owner.

And the vast majority of transport companies are still small with an average of 10 trucks. How to organize transportation remains inefficient, with more than 70% respectively in vehicles without cargo trip, and 30% of the time used vehicle losses due to improper allocation and cargo stowage wait .

Efficient delivery for convenient sales channel

In the past 5 years, business models and convenience store ecommerce (EC) is gradually penetrate the Vietnam market.

A variety of convenience store chains have and are continuing to be open at the point in densely populated cities. Currently, with a population of 90 million people, Vietnam has about 400 convenience stores.

If compared with Thailand, a neighboring country with 60 million people has 10,000 convenience stores, or than 50,000 convenience stores for 130 million people in Japan, they can see business trends convenience store in Vietnam is inevitable.

According to the Nielsen report, in 2014, the number of shoppers in the traditional market channels down 5%, down 17% for traditional grocery stores and 22% of consumer buying habits in the convenience store channel error.

The development of the convenience store channel requires logistics industry must be able to deliver small, regularly and on time, allowing removal of inventory in stores and optimize sales area but not to occur the loss of sales due to out of stock.

In addition to optimizing the delivery capability, investment in equipment and process development for warehouse dedicated to meet the convenience store channel has not been much interested in doing business in retail and logistics.

Along with convenience stores, e-commerce model is also growing very fast in Vietnam. Vietnam currently ranks 4th in e-commerce growth in the Asia - Pacific.

According to the E-Commerce and Information Technology, in recent years, sales of e-commerce channel to reach USD 2.97 billion, equivalent to 2.12% of total retail sales.

Characteristics of the e-commerce channel sales capabilities range from urban government to rural areas through the internet. However, it is precisely because of the large government burden on logistics costs is also a difficult problem for e-commerce businesses.

Frequency of large retail delivery, coverage of services across the province - a key feature of the logistics service for e-commerce channel.

Construction of modern logistics network

In the context of modern distribution channels are thriving in Vietnam as well as the geographical characteristics of the country, companies in the manufacturing, retail and logistics all have the same question, which is how to build highly efficient logistics network, close to reality as possible in order to minimize errors, reduce risks in investment and development.

There has been a solution is considered "best practice" of the pioneers in the industry.

Specifically as "CELSim" - a model of high-tech simulation functional operation of the distribution network, logistics to a forecast error mitigation, serve the needs of network development or network optimization current grid.

This model CEL Consulting Company deployed, capable of accurate simulation of enterprise logistics network, using a combination of standard parameters and the individual parameters of each type, line of business to make realistically simulated.

Since then ran simulations under the assumption case, quantifiable results achieved in each KPI and help companies choose the most suitable direction.

One bright spot is that the process of "City Logistics", is defined as the process allows optimization of goods distribution in cities, are considered and adjusted for factors on traffic, congestion and risk Explosion, allows reduction of car traffic in the city but still reached the operational efficiency required.

This process was developed, applications by companies such as GMD Logistics, Geodis Wilson ...

The latest is the process of "Ahamove", have the same technology platform as GrabTaxi, Ahamove, developed to serve for delivery in the city and is expected to have the ability to respond to the e-commerce channel.

This technology was developed as an app for smartphones, allowing delivery via a three-step set manipulation with a list of free traffic is controlled by GPS navigation system, allowing managing delivery schedule in real time and are rated by customers to improve service quality.

Accept investment, technology applications, enterprises are expected logistic Vietnam will soon outgrow fragmented, creating breakthroughs.

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TIGER LOGISTICS COMPANY LIMITED

Address: No 32, D5 Street, Ward 25, Binh Thanh District, Ho Chi Minh City, Vietnam
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Email: manager@tigerlogisticsvn.com
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