E-commerce firms not only are spending big money to run marketing campaigns to lure more customers, but are also expanding their warehouse networks and logistics services.
Giao Hang Nhanh (GHN) has put an automatic goods classification system into operation at its Long Bien warehouse in Hanoi which can classify 30,000 items an hour. In the past, when the classification was done manually, it took GHN three hours to classify goods, while it now takes 30 minutes only.
“This is outstanding delivery speed which can compare with most e-commerce in developed countries such as the US, China and South Korea,” said Luong Duy Hoai, CEO of GHB.
Meanwhile, BW Industrial, which has an industrial land fund of 230 hectares in Vietnam, announced strategic cooperation with Shopee and BEST Inc. The storehouse in HCMC is the third order of Shopee and the first automatic storehouse of BEST Inc in Vietnam.
|BW Industrial, which has an industrial land fund of 230 hectares in Vietnam, announced strategic cooperation with Shopee and BEST Inc. The storehouse in HCMC is the third order of Shopee and the first automatic storehouse of BEST Inc in Vietnam.|
BEST Inc is a Chinese smart logistics service provider in China which has been taken over by Alibaba. It handles 20 million delivery orders each day, and the figure is expected to hit 30 million later this year.
The moves by GHN, BEST and Shopee in seeking and upgrading storehouses show the stiff competition in the e-commerce market in Vietnam which, as predicted by Euromonitor, wilm see growth rate of 32 percent per annum in 2018-2022. Meanwhile, about 30 percent of population is expected to shift to online shopping by 2020.
E-commerce firms in recent years have spent a lot of money to improve logistics which optimizes performance and operation costs.
Tiki has cooperated with UniDepot, a company specializing in providing warehousing and logistics services.
Meanwhile, Lazada has expanded its warehouse network in HCM City, Da Nang and Bac Ninh. LEL Express has put the second classification center in Hanoi into operation with capacity of 10,000 products per hour.
“In the forwarding sector, transport takes most of the time, so the time to handle orders must be shortened,” said Tran Ngoc Thai Son, CEO of Tiki, affirming that upgrading logistics capacity is the way for Tiki to follow to compete with rivals in the e-commerce market.
With high continual growth since 2015, the Vietnam E-commerce Association (Vecom) predicted that Vietnam’s e-commerce would have value of $13 billion by 2020.
Modern logistics is the way for e-commerce firms to optimize the labor costs. C.K. Tong, CEO of BW Industrial, said the two warehouses BW Industrial provides to partners have the total area of 5 hectares in HCM City.
With the two products, BW Industrial hopes to create a new concept about smart logistics. It is developing an industrial real estate and logistics base which can satisfy the requirements of 3PL multi-national groups.
HCM City is working on a logistics development strategy that would make the city a major logistics hub and reduce logistic costs to 16 per cent of Viet Nam's GDP in 2025.
Japanese and South Korean are running a race to pour capital into Vietnam’s logistics industry.