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Logistics: A Game-Changer For The Evolving Global e-Commerce Market

by Dr. Karen Reddington, President of FedEx Express, South Pacific

Mobile has become the main touch point with customers and they expect the kind of customer experience and convenience that we take for granted today, whether we’re ordering a ride or paying through WeChat. Whether it’s secure payment, returns, last mile, cross-border – or a multitude of others such as fulfilment, tracking, transport, even shopping cart management, each element is part of a highly complex ecosystem supported by logistics which is the engine of global e-commerce.

While we’re not going to be able to predict exactly how e-commerce is going to evolve, there are a few areas that we believe are important.

1. Investment in infrastructure.

A virtual buying and selling world must be rooted in the physical, and there is not enough focus on what happens from the mobile phone onward. This is equally important for retailers – there is an incredible opportunity for retailers to leverage their infrastructure in combination with the kind of services FedEx provides.

2. Distinguishing between local and global needs.

What China needs and wants is very different from Singapore or Japan. For instance, in arguably the world’s leading market – China, we are using WeChat to enable mobile payments. We also need to separate out what are essentially local delivery challenges – what we call “last mile” – as opposed to what’s needed globally.

3. Increasing efficiency and convenience in delivery.

Residential e-commerce is the fastest growing market and requires innovation to make delivery to consumers more efficient. As more and more consumers shop online, we have to expand alternative delivery options from having a package shipped directly to their doorstep to self-collection solutions like 7/11 and locker boxes, to more flexible and convenient customized home deliveries.

We also need to gear more services to small and medium-sized businesses, who need access to a logistics network that helps them achieve profitable and scalable global growth, to ship seamlessly to international locations.

Another area is returns, which may not sound glamorous but is an increasingly important part of the picture for global e-commerce. E-commerce has a much higher rate of returns than brick and mortar purchases – it ranges from 15% to as high as 30%, and we must increase confidence if cross-border commerce is to grow.

With 90% of logistics happening behind the mobile phone, there are no apps or innovations that can replace the aircraft, trucks, or other infrastructure that enables the physical transportation and delivery of goods around the world every day. We must keep evolving to meet the changing needs that digital and e-commerce is bringing. FedEx believes the future for e-commerce must be viewed within a wider framework as a complex ecosystem.

 

* This article is originally published on FedEx Business Insights Hub. Business Insights Hub, delivered by FedEx, provides the latest thinking on global opportunities. For more advice, trends and insights to grow your business, please visit FedEx Business Insights Hub.

 

Karen Reddington is President of Asia Pacific Division of FedEx Express, the world’s largest express transportation company. In this role she heads up Asia Pacific from its headquarters in Hong Kong. The Asia Pacific Division comprises three regions: North Pacific, based in Tokyo; China, based in Shanghai; and South Pacific, based in Singapore. Dr. Reddington is responsible for leading the FedEx business across the region, including overall planning and implementation of corporate strategies and operations across 30 countries and territories with more than 18,000 employees.

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