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Here’s what you should know today:

1. DHL deploys electric motorbike for ecommerce delivery in Vietnam

Ecommerce division of DHL Group, DHL eCommerce, has launched its nationwide domestic delivery operations in Vietnam, managed by hubs and depots strategically located throughout the country.

The network also support cash-on-delivery (CoD) service and consumers will also be able to open, check and return goods at the point of receipt thanks to DHL’s Open Box Delivery service.

“Only 15% of Vietnam’s ecommerce shoppers paid online in 2016,” said Thomas Harris, Managing Director, DHL eCommerce Vietnam.

In line with its recent announcement to reduce all logistics-related emissions to zero by 2050, DHL eCommerce has begun deploying the use of electric motorbikes in its domestic delivery operations in Vietnam.

Read the full story here.

2. Cambodia ad agency MSA join forces with Malaysia-based VLT

Malaysia-based VLT, one of Southeast Asia’s leading independent digital advertising agencies, has formed a joint venture with Cambodia-owned advertising firm MSA to take advantage of the growth in Cambodia’s digital advertising, media and services market.

Adrian Lim, CEO of VLT, said Cambodia was one of the young and dynamic business growth areas in Asia, and there was a huge need of digital advertising solutions here.

“I’d like to say, what no one has dared to say. Digital is a mainstream,” Phirun Kao, CEO of MSA said. “Digital is at the core of all advertising in every communication we do for our clients.” he added.

Read the full story here.

3. Uber and Grab are set to pay P5 million fine in the Philippines

Online ride-hailing companies, Grab and Uber are set to finalize their payments for the P5 million fine ordered by the Land Transportation Franchising and Regulatory Board (LTFRB) of the Philippines.

According to Grab Philippines Public Affairs Head Leo Emmanuel Gonzales the company will complete the payment of its fine on Wednesday, July 19. Meanwhile, Uber Philippines Communications Head Cat Avelino said its payment is already on its way to the LTFRB.

The LTFRB slapped both Grab and Uber with a P5-million fine on July 11 for various violations, such as allowing drivers to operate without the necessary permits from the regulatory body.

Read the full story here.

 

There’s increasing pressure for ecommerce companies to offer customers “value-added services” such as same-day delivery or offline pick-up points thanks to a growing generation expectant of instant gratification – waiting even 3 days for a package isn’t going to cut it.  

Online brands and retailers end up working with a variety logistics companies to deliver orders across urban and rural areas in a quick fashion to appease customers. This is a trend not only in developed economies, but demanded in developing countries such as Thailand and Indonesia as well.

Progression of logistics in Southeast Asia

Southeast Asia is poised to become one of the world’s fastest growing market for ecommerce, estimated to exceed $238 billion by 2020. Known to be ridden with infrastructure challenges such as fickle trade regulations and lack of roads, government initiatives across the region are being put in place to improve logistics.

An example is the Indonesian government’s push to increase accessibility of islands in the country by constructing a road alongside the Malaysian border and building seaports.

“If you look at the roads, airports and railways, things are improving and will continue to. Infrastructure spend in Indonesia is expected to reach $165 billion by 2025 and the spend in public investment expected to increase by 7% per year,” says Charles Brewer, CEO at DHL Ecommerce.

Thailand also has a $50 billion infrastructure budget as the country plans to improve roads, highways and railways in the upcoming years.

But long term changes will take both investment and time before the region’s infrastructure can catch up to “same-day appetite” in developing markets and at a relatively inexpensive cost.

The ‘Light’ Model

In the meantime, online players can rely on the rise of an on-demand, lighter logistics model that tackles issues of long delivery periods and limited distribution in rural locations.

According to real estate consulting firm CBRE, modern logistics services are shifting away from big box warehouses, bulky deliveries and in turn, expanding their networks with existing infrastructure or building small counters across the country to meet the demands of clients.

Examples of this in Bangkok include SKYBOX pickup and dropoff kiosks, located at the city’s public train stations and Zalora Thailand that uses 7-Eleven as return points.

Logistics providers are also introducing collection points at existing locations such as shopping centers or office buildings in second and third tier cities as seen by DHL Ecommerce’s recent nationwide expansion in Thailand. The company’s aim is to decrease the time SMEs take to ship parcels.

According to a DHL survey, 55% of SMEs cite logistics as a time killer.

It’s resource heavy to build new hubs and roads and companies can’t afford the time needed to see infrastructure improvements and capture market share. By turning to a light model, logistics services can provide efficient, speedy services without big investments.

Adapting to (on) demand

Southeast Asia’s increase in delivery expectancies could be attributed to the fact that mobile subscriptions are ahead of the global average with 854 million mobile connections. These mobile first users can easily request for on-demand groceries, t-shirts and hot meals on the go with their phones.

Next day delivery account for 95% of existing logistics services in Thailand, while the remaining 5% is filled by on-demand delivery services. There’s still a vast opportunity for logistics players to service ecommerce companies that require speed and efficiency.

In Indonesia, there are PopBox lockers designed to make last mile more convenient for shoppers and merchants. According to William Tanuwijaya, CEO of B2C marketplace Tokopedia, “courier businesses will grow as they are needed to deliver products sold on marketplaces. The promise of fast delivery is also appealing to locals.”

In order to fully serve Southeast Asia’s growing customer demand for faster deliveries, logistics companies need to offer localized, out of the box solutions such as pick-up points in parcel shops, partnerships with convenience stores, lockers or risk being left behind.

 

Here’s what you should know.

1. Facebook beats expectations across the board with Q4 results

What? Mobile ads drove a 50% jump in revenue that far outpaced the company’s spending, with the company inching closer to gaining an unprecedented audience of two billion monthly users.

Shares of Facebook, which have risen about 14% since the start of the year, were up about 1.5% in after hours trading on Wednesday. Mobile continued to play a key role in revenue growth during the last three months of 2016, with mobile ads accounting for 84% of total ad revenue during the quarter.

Read the rest of the story here.

 

2. Indonesia’s financial ecommerce provider Cermati raises seven digit funding

What is Cermati? Cermati’s online offering helps customers research and get financial products, such as credit cards, auto loans, personal loans and mortgages that suit their needs.

Where did the funding come from? The seven figure digit funding came from Orange Growth Capital (OGC), a fintech VC firm.

What will the funding be used for? Team expansion, product development and technical enhancements.

Read the rest of the story here.

 

3. Amazon will build its own $1.5 billion air cargo hub

The company just revealed that it’s investing $1.5 billion in a new air cargo hub, which will occupy a spot that crosses the Cincinnati and Kentucky border, and eventually result in around 2,000 total new jobs. The planes are designed to help Amazon handle its increasing transportation needs, which are growing as its share of global retail business increases.

Read the rest of the story here.

 

Community Chatter: Industry experts are talking about Gita, a parcel carrying robot

Read about Piaggo’s Gita here.

eIQ is also on twitter, join in on the conversation with us here

One of the most interesting parts of my job is going on regular courier rides with some of my employees. A few months ago in Thailand, I sat in one of our DHL courier vans as it made its rounds at speed. As the week progressed, my time in the van with my front line employees and customers reinforced my thoughts on the growing complexity and huge upside of ecommerce in the region.

Southeast Asia is a hotbed for online trade. By 2020, more than 480 million people in the region will be online. At the moment, 3.8 million new users get connected to the internet every month.  Ecommerce in the region is expected to be worth US$88 billion by 2025.

There are high volumes of deliveries across the countries: Thailand, Malaysia and Vietnam have more than 150,000 B2C parcel deliveries a day and still only represent between 3-5% of all retail sales in their respective countries.

It is a huge and growing ‘pie’ for new and existing e-tailers. Whilst it is a great time to be an e-tailer, the opportunity also comes with some challenges. Customer requirements are becoming more complex as are the channels that merchants have to keep up with them.

One of the biggest signs of this trend is the way Southeast Asian customers interact with brands.

Among digital shoppers, 80% use social media to research products and interact with sellers. Shopping via mobile devices has also become the norm, especially for those who live outside metropolitan areas, 85% outside the major cities use their mobile phones for online purchases.

As ecommerce becomes more prevalent, customer expectations will continue to rise. They will have less tolerance for delays and be frustrated at lack of choice.

When I spoke recently to one of our partners, Hans-Peter Ressel, CEO of Lazada Malaysia, he remarked to me: “When customers buy from us today, they are looking for a seamless shopping experience. As e-tailers, we can’t afford to skimp on our logistics capabilities.”

It’s important to continuously offer fast, convenient, and reliable delivery options, because this is what customers are expecting today.

So, let’s take a step outside and consider what exactly is it that Southeast Asian customers wants after they hit the ‘check-out’ button. What makes them tick? What do they like? What frustrates them?

From my journey walking the ground in our facilities, to sitting in our delivery vans, I’ve noticed three things that customers in the region want from their e-tailers today:

1. Variety to match their diverse needs

The ‘on-demand’ economy has given customers many options and their expectations have changed considerably as a result. Not only do customers want faster delivery options, but a pre-determined and agreed delivery window. Customers also expect payment options catered to their needs because payment preferences vary across different countries depending on their maturity. In several developed cities like Singapore, customers can pay via credit card. However, when it comes to the 60–70% of people in Indonesia, the Philippines and Vietnam who are “unbanked”, cash on delivery still reigns supreme.

Customer demands have diversified, and so should the services e-tailers offer. They must become more sensitive to on-the-ground feedback from customers to be able to adjust their offerings to suit their needs.

Don’t treat deliveries as a cost center: in the long run, a great delivery experience will pay dividends.

Brewer’s Top Tip: Approach the delivery process as part of the value chain. A variety of payment and service options, coupled with excellent service, can create ‘raving fans’, or emotionally engaged and loyal customers who drive up repeat visits and basket size.

 

2. Hassle-free deliveries

Today’s busier and multi-tasking lifestyles mean that customers have little time to spare and short attention spans. Deliveries have to suit the consumer’s schedule, not the e-tailer or delivery company. One of the best ways e-tailers can add value to their customers’ lives is to offer a variety of delivery options.

Apart from the traditional home or office deliveries, they can make use of what is now the fastest growing delivery method in Europe: parcel lockers, service points, and convenience stores. These facilities are located in areas that customers frequent, so they don’t have to be stuck waiting for delivery staff to arrive. More pick-up options will make the collection experience much less disruptive to their daily lives.

Brewer’s Top TipPartner with a delivery company that can provide alternate delivery options (and not just one), without skimping on order visibility for customers.

 

3. Tools for more control

When it comes to deliveries, customers want to be empowered. They want the best experience possible—from the moment they make their purchase to the point of delivery when they receive their package. 60% of digital shoppers in Southeast Asia rank “experience” as a bigger factor than “price”, which only influenced 45% of those surveyed.

It is important for e-tailers to provide a sense of control and comfort if they want customers to keep returning. They can empower customers with the ability to track and trace their purchases every step of the way. This capability can be performed via a variety of methods, such as online portals or SMS notifications that allow customers to access updates on the go.

Brewer’s Top Tip: Give consumers control as part of your operational process flow. To really go the extra mile, ensure your partners have the IT capability to allow customers the flexibility to change their minds about where and when to receive their order.

At DHL eCommerce, we have already helped hundreds of e-tailers circumvent the challenges I have described. There’s never a better time to build choice, convenience, and control into e-tailer offerings that both e-tailers and consumers can delight in. These demands will continue to grow as ecommerce expands.  Our passion is in knowing more about the diverse consumer needs across the region and tailoring ecommerce logistics solutions that fit the requirements of each market.

 BY CHARLES BREWER, CEO AT DHL ECOMMERCE