The E-commerce market of South East Asia is booming: this rich region to watch for 2017 contains over 620 million potential customers, and e-commerce owners are scrambling to penetrate these markets.
We had the opportunity to correspond with Charles Brewer, CEO of DHL e-commerce in South East Asia, where logistics and speedy delivery are a #1 priority for customers. A proven expert in supply chain management with over 32 years of cross-border logistics experience, Charles was the Managing director for DHL express in Sub-Saharan Africa, where he was responsible for the operations of 54 different countries and territories.
Today, he leads a global team responsible for developing solutions in the e-commerce sector. We had some questions about the market in South East Asia, about trends and how DHL is responding to them. Charles shared interesting insight about this booming market, which we’re happy to transmit for our readers:
What are some of the global e-commerce trends to watch?
“This is a really fast moving industry and very hard to predict today, let alone tomorrow, however:
The on-demand economy is booming
Only a few years ago, delivering in 5-10 days was completely acceptable. Today, the consumer wants delivery options – immediate, same-day, next day, specific time windows, choice of delivery options, choice of day of delivery, preferred temperature. It is hard to keep up, but what was once something that was a ‘nice to have’, it is a ‘must have’ today.
The rules of the game no longer exist
Traditional brick and mortar retail is pretty much stagnant, whilst global retail e-commerce continues to grow double digit through 2020, with sales topping USD 4 trillion.
The changing game and the increasing demand mean that e-tailers and logistics companies need to be agile, innovative and incredibly customer-centric in order to stay in the race and win out over time.
Choice, convenience and control
E-tailers now recognize more and more that the customer experience and therefore their ability to build loyalty is won and lost in how well the order is fulfilled and delivered.
Consumers want to select how they receive their order (to their door, parcel lockers, service points, car trunk, etc), where they receive it and on what day and time.
Technology, Autonomous Vehicles and Robots
The uberization of our industry is driving us to look for new innovative ways to deliver, new innovative and seamless technologies to provide real-time visibility, new technologies that take the guess-work out of order management and most importantly provide unparalleled efficiencies.
Whilst we are busy doing that, we are rapidly exploring and testing tomorrow’s technology such as augmented glasses for greater pick accuracy, “follow me” robots, autonomous vehicles.”
How does business in Singapore and South East Asia differ from the rest of the globe (What makes it unique?)?
“The challenges and considerable opportunities are pretty consistent from one region to another. The good news with regards to South East Asia is that it has a population of 620 million, all with one important thing in common: growing appetite to use mobile technology to shop.
Like many other regions the growth is considerable, and note that we really are still just starting out – online sales as a percentage of retail sales still only account for less than 5% across the region and that provides quite a considerable upside!”
What do you think is the biggest challenge facing sellers in South East Asia, and what are you doing to combat it?
“Satisfying the huge demand, getting the order delivered and getting paid.
60-70% of the population of Indonesia, Philippines and Vietnam are “unbanked”, therefore there is a heavy dependence on ‘Cash on Delivery’ (COD). Our couriers and more specifically their delivery applications are built to accommodate the high percentage of COD transactions.
With the increase in mobile wallet in the region, we will see more and more digital transactions as opposed to physical cash.”
What is the biggest thing in terms of logistics that a lot of e-commerce professionals overlook?
“They miss the point that delivering an outstanding delivery experience will drive the consumer back for repeat business, and failing to do so drives the very same consumer into the waiting arms of their nearest competitor.”
What fact or statistic would shock people outside of South East Asia in terms of the growth of e-commerce in the region?
“With a population two times larger than that of the U.S., South East Asia faces high rates of Internet and mobile penetration – the population is actively taking advantage of new opportunities to purchase products and services online, with an existing internet user based of 260 million growing to about 480 million users by 2020.
South East Asia is poised to become one of the world’s fastest-growing regions for e-commerce revenues, exceeding US$25 billion by 2020.
That makes this a really important market for DHL and as such we will continue to invest to create innovative solutions that meet the demands of both the consumer and the e-tailer.”
What is the best way for e-tailors to reach consumers in this region? What are consumers in this region looking for?
“The key is to provide omni-channel solutions and not cut-corners on the last mile (excuse the pun!). Select a partner like DHL that provides fulfillment, domestic and cross-border solutions that tick off the consumers need for choice, convenience and control and an amazing experience.”
What have you done with DHL to help grow your market reach in South East Asia?
“South East Asia has always been a really important market for DHL – we have been present in South East Asia since 1971 – and provides an unparalleled footprint and product range as well as equally important, an appreciation for the South East Asian markets.
In January 2016, we launched our first pure play B2C e-commerce delivery solution in Thailand, which is going really, really well – so, keep shopping and remember, DHL will continue to ‘put the smile in the last mile!'”
It’s always important to adapt to the needs of your target market on a local level. DHL responds well to this, having developed its infrastructure for the last 40 years within the region, and innovating their solutions for customers all over the world. It was a pleasure to correspond with Charles and his team at DHL, and I’d like to thank him for the time he took to respond to my questions.
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