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E-commerce Fulfillment & Delivery InsightsA Southeast Asia Emerging Markets Perspective
Ray AlimurungCEO, aCommerce Philippines
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World Mail and Express Conference and Exhibition 21 Oct 2015 Sofitel, Manila
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Agenda
• Market Landscape
• About aCommerce
• Fulfillment & Delivery Insights
• Key Takeaways
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SE Asia is the next e-commerce gold rushEstimated at USD 7B in 2013
Source: A.T. Kearney
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SE Asia e-commerce is <1% of total retail
Source: A.T. Kearney
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SE Asia e-commerce is growing fast
Source: A.T. Kearney
Estimated to grow to USD 17B by 2017 (25% CAGR)
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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
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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
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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
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Fulfillment & Delivery Insights
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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?
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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
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Website must show only inventory available for sale
Issues typically due to:
• manual entry
• sync frequency/quality
• poor catalog/inbound/outbound practices
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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
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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
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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
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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
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Keep customers informed#1 reason for customer contact is ORDER STATUS
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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
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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
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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] ✔ ✔
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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
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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
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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
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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
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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
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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
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Thank [email protected]