Articles
How E-Commerce Logistics Market is Supporting Growth of Courier and Express Delivery Market
by Rati Ram Business DeveloperKen
Research reveals that Rising Internet Penetration, Growth in Last Mile
Delivery, Preferences for Online Shopping due to Better Discounts and Online
Grocery Logistics is Expected to Drive E-Commerce Logistics market in
Philippines.
Philippines E-commerce logistics market has been
observed in its early stages of developments majorly driven with an increase in
internet affinity and demand for value added services. In addition to this,
various logistics service provider’s offers additional services and discounts
for online orders. The market holds tremendous potential for future growth
largely owing to the fact that E-commerce firms/platforms of Philippines have
shifted their focus to increasing customer engagement and hence are
concentrating more towards deal savvy customers by offering discounts and flash
deals for fashion apparels, beauty products, gadgets and technology.
Focus
towards Customer Engagement by Online Platforms: Increasing
Usage of Advanced Mobile Applications and banking solutions for the customers
has made it easier for them to shop online, which further intensified the
e-commerce logistics market in the Philippines. Number of internet users has
increased from 47.4 million 2015 to 67.0 million in 2018. Filipinos are among
the world’s heaviest Internet users, spending an average of 10 hours and two
minutes using the Internet every day. Furthermore, Philippines have a young,
tech-savvy population (the average age is 24.3 years). The majority of
Filipinos who shop online belong to the age group of 18 to 31 years who are
tech-savvy and prolific social media users. Most of the online shoppers in
Philippines belong to middle income group
Declining
Average Logistics Order Cost: The average logistics
order cost in the Philippines was evaluated at USD 1.6 per order in 2013 which
further declined to USD 1.2 in the year 2018. This was majorly due to increase
in the total number of consumers and average revenue earned per consumer for
E-commerce, thus leading to increased online spending. Some of the fastest
selling product categories include fashion, electronics, food, furniture, and
toys.
Promoting
E-Commerce Logistics Development in the Rural Areas:
Due to remote locations and lower levels of E-commerce awareness in the rural
areas, this population segment lacks compared to urban sectors. Transforming
small rural supermarkets into multi-functional commerce and distribution
centers would enable them to provide a variety of service offerings to rural
residents such as helping customers to order tickets online or purchasing goods
from E-commerce websites.
Improvement
in Last Mile Delivery: Last mile delivery is
the only link in the E-commerce supply chain that connects the customer and the
delivery person, especially on a door-step delivery. Consumers are highly
likely to discard a retailer when there are issues with their deliveries, thus
making a good user experience essential for companies. This can often prove as
one of the critical parameters for evaluating customer experience and
efficiency of final delivery. New models for handling the last mile such as
“click and collect” locations are further anticipated to drive the growth of
E-commerce logistics with a CAGR of 24.6% during 2018-2024, with revenues
reported at PHP 36.6 billion by 2024.
Delivery
Preference for E-Commerce Logistics Orders in Philippines:
One day delivery has dominated the market in terms of number of orders owing to
increasing focus of the companies on providing better services coupled with
increasing customer needs for better service. Clothing, Fashion Accessories and
Others are the major products which are delivered through one day delivery. Various
E-commerce giants such as Lazada, Shopee and Zalora have started to offer 2
day/1 day delivery along with minimum cart order, thereby attracting consumers
to actively seek for free shipping while shopping products on online portals
and buying more in terms of value thus aiding the business of these companies.
Preference
towards In-house Logistics Operations: Domestic
companies majorly prefer to manage their own operations for better efficiency
and ease of government norms for domestic companies. To win the trust and sales
from customers, e-commerce companies emphasize on timely, reliable, convenient
delivery as an integral element of their business model for creating for customer’s
most rewarding shopping experience.
Dominance
of Cash on Delivery as Payment Mode: Cash
on delivery as the mode of payment has dominated the market owing to low
consumer confidence in online payments and limited card penetration. Near about
80% of the orders for e-commerce in Philippines are being done for Cash on
Delivery
According to the study by
Ken Research, Philippines Logistics and Warehousing Market contributed
over PHP 632 billion during 2018. This is expected to grow to over PHP 1,010
billion by 2024. The Government of Philippines has come up with a ‘National
Logistics Master Plan (2017-2022)’ which aims to advance Philippines
competitiveness through the establishment of an efficient transport and
logistics sector that will contribute towards a robust and resilient Philippine
economy. The logistics companies are expected to invest on advanced
technologies solutions such as autonomous logistics, real-time tracking,
automation and robotics in order to provide an improved customer service. With
the growing international trade, incorporation of advanced technology based
solutions will help in an efficient delivery of products by the logistics
providers.
Conclusion:
The growth of e-commerce logistics has supported development of Express
logistics market due to an expansion in the Filipino economy. The growth of
e-commerce industry, increasing penetration of international and domestic
players and growing industrialization has positively affected the growth of
express delivery in the country. The need for time bound
deliveries/e-commerce orders coupled with quality service is expected to drive
the express delivery market in the coming years. Furthermore, the need for time
bound delivery will increase with economic growth and development of trade and
commerce thus creating growth opportunities for the express industry.
For
more information on the research report, refer to below link:-
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About Rati Ram 
Business Developer
173 connections, 3 recommendations, 575 honor points.Joined APSense since, February 12th, 2014, From Gurgaon, India.
Created on Jan 23rd 2020 03:27. Viewed 338 times.
