At the recent eDelivery Expo in Birmingham, England, Mark Millar delivered the closing keynote address exploring the dramatic growth of Omni Channel Supply Chains in China.
Held at Birmingham’s NEC, this year’s eDelivery Expo focused on Operations in Multichannel, and how supply chains need to respond to the rapid growth of online shopping.
Drawing on his own experience of the very dramatic growth of the omni-channel in China, Mark addressed the ways in which companies can do business in this lucrative area – identifying what customers really want and how companies can hone their supply chains for a competitive edge.
He examined some of the challenges and opportunities with e-delivery solutions in China, including the market’s massive fragmentation, the complexities involved in bringing together many different but interconnected parts, and the sector’s susceptibility to constant change.
To demonstrate the importance for companies of carefully considering their approach to e-commerce supply chain ecosystems in China, Mark went on to compare the examples of two of China’s biggest e-commerce providers – Alibaba and JD.com.
Alibaba had opted to assemble a logistics network comprising multiple courier service providers, connected and enabled through its own technology platform, said Mark, creating its own ecosystem. It had also partnered with major Chinese retailers to provide click-and-collect services for the online-to-offline model (O2O) and enable access to a domestic logistics delivery model servicing all of China.
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In contrast, Mark said, JD.com had chosen to build its own in-house logistics operations capabilities, using the company’s own distribution centres, warehouses, trucks, vans, sortation centres, collection points and manpower – to deliver 85% of its daily throughput of 3.6 million online orders on a same-day or next-day basis across the whole of China.
Looking at the exponential rise of the e-commerce frenzy in China, Mark said: “This year’s eDelivery Expo reinforced the fact that the omni-channel is very real and is happening now. When it comes to online consumers and online shopping, the numbers in China are staggering; this e-commerce frenzy is projected to generate a staggering 50 billion deliveries in the year 2020.
“Chinese consumers have already become accustomed to free delivery when shopping online, more than 50% of which is conducted via mobile devices. The challenge for any organisation selling online in China is to be able to match this promise of free delivery while also providing a great consumer experience – especially during the crucial last mile.”
Mark Millar is the author of the widely-acclaimed book Global Supply Chain Ecosystems and is a respected authority on logistics and supply chain strategies, industry trends and market developments. His informed perspectives and educated insights help companies to navigate the complex business landscapes in Asia, empower their supply chain ecosystems and make better-informed business decisions.
The China E-Commerce & Logistics Mission to Shenzhen and Hong Kong during 10-14 October provides an ideal opportunity for companies to explore new business opportunities in this exciting market.