We all appreciate the future growth prospects of Indonesia ecommerce market and how this industry is becoming center of attraction for some global brand retailers to expand their market channel. As CLSA 2015 reported Indonesia ecommerce sales in 2016; expected to have US$ 25 billion.
In the other hand, the needs to have seamless and fast process in the behind ecommerce store in order to reach online customers’ satisfaction, is what most challenging issue at the same time. Consequently the supply chain and logistics for keeping the ecommerce business process well is getting redefined, since the pattern and landscape is totally different from the B2B logistics (traditional logistics – most supply chain Indonesia company focus now). With these facts, ecommerce industry has thrown new challenges in logistics and supply chain areas.
The following table I show you the difference pattern among B2B logistics and ecommerce logistics:
Different from B2B logistics, in ecommerce, customers need faster deliveries. Not to mention, there are multiple lead time requirements based on the customers’ requirements. These complexities include moving the ordered product from pallet to piece pick at all levels of the supply chain. In complexity of deliveries – there are numerous customer address which is just getting more various than B2B logistics which only have fewer address. Complexity of orders which also push ecommerce logistics proceed details check per order piece to deliver right products is higher than B2B logistics, and this is include returned good rate which increase until 30% compare to B2B logistic have. It is interesting fact as well to know and understand how ecommerce distribution aims to keep on well managed its last mile delivery which consisting of huge number of customers; which every order has own size and volume. Ecommerce orders surely are changing the B2C delivery landscape.
Through that issue, it is been priority thing for global brand retailers who want to seriously enter and develop their ecommerce business to collaborate with the right business partner that can simply manage and integrate both ecommerce logistics and last mile delivery. Why this action needs to be taken, these are the following reasons:
1. Integration, with seamless process. When you assign with one ecommerce enabler and fulfillment company that has expertise handling Indonesia coverage, they used to have technology in ecommerce system that integrate all process including logistics to last mile delivery. Actually this ecommerce system has been applied from the beginning when ecommerce site built, which sustainably real time will monitor all activities in online until when the order settled. It connects with order management system include inventory stock report which links to omni-channels so there is no incorrect stock balance across the channels. This is important for global brand retailers, since usually they do not only exist in one channel, which in the other hand, they want to see simple interface real time report for inventory stock. This integration technology in ecommerce system you won’t get when you outsource ecommerce logistic separately with parcel delivery, or you take care ecommerce logistics by yourself and outsource parcel delivery company. It means you will still be forced to manage details order from logistics to last mile delivery.
2. Lower cost and faster delivery. Indonesia is one largest archipelagos country in the world. It records more than one thousand islands with so many rural areas that create more challenging issue in distribution networks. Some of them are cost efficiency and delivery time.
In other case that shown by CLSA Report 2015, there are 66% non-Java online shoppers expend more US$20 than Java shoppers. As Indonesia is archipelagos country, it has extremely low offline retail penetration (physical stores), which creates a large opportunity for the online retail sector to fill. That means there is bigger expectation for ecommerce business from people outside Java island.
Through these issues, the presence of fulfillment center in main islands, include non-Java islands, with supported by ecommerce system technology that synergized all logistics and distribution process as well, will be considered so much helpful to cut some supply chain process becomes more efficient and faster. A scalable ecommerce enabler and fulfillment company used to have more than one fulfillment center in one region. Knowing your ecommerce enabler partner’s asset, fulfillment presence and experience handling Indonesia logistics coverage is believed might be strategic reason before deciding the collaboration. You must make sure the partnership will strongly succeed bring the most efficient ecommerce logistics that will both effect for lower cost and faster in delivery time.
3. Professional ecommerce logistics and order management. Different with B2B logistics, ecommerce logistic has B2C logistic and delivery landscape that reformed the process paths becomes more speed, more accurate and more complex. It needs high experience skill people with supported assets, infrastructure, standard of quality and technology that cover all these needs. If you need to focus on how to scale up your ecommerce business in terms of branding and marketing, outsource to 3rd party that can handle ecommerce logistic and order management is a wise strategic step. I believe there is still win-win offering for having reliable ecommerce enabler partner in Indonesia to do professional ecommerce logistic and order management that doesn’t inquire huge investment at the front.