Mhlnews 3195 News Dhl

Logistics is Key to E-Commerce Growth in Developing Markets

June 23, 2014
Details as small as the development of address systems are still a major challenge.

Over the next 10 years, online retail will continue to gain popularity in both developed and emerging markets and as a result, logistics companies will have to play a key role in providing supply chain management services that evolve with consumers’ changing shopping habits.

This is one of the key findings in the DHL Global E-Tailing 2025 study, which explores future scenarios with alternative views of what eCommerce globally could look like for consumers and businesses.

According to Thomas Kipp, CEO of DHL eCommerce, the United States will maintain its leading role in e-commerce, while emerging markets still need to create the infrastructure allowing logistics companies to play their role as growth enablers.

“One of the key prerequisites for properly functioning e-commerce is to have effective address systems,” he says in the report. “This is still a problem which must not be underestimated, even in up-and-coming economies such as those of China and India.”

In the meantime, those economies must focus on the merger of retailing and logistics – especially at regional level, he adds.

“In China, for instance, many taxi drivers casually sell goods from the trunks of their cars. And at the many “night markets” there are numerous retailers who also offer goods via portals. The logistics then organizes itself, so to speak. However, systems such as these are not easily scalable. If large quantities of goods really do change hands, a professional logistics chain is needed. Over the next 15 years e-commerce will continue to develop in this way in the emerging countries, with the large Asian cities and the U.S. market serving as ‘role models.’”

According to Sumesh Rahavendra, head of marketing for DHL Express, Sub Saharan Africa, e-tailing in developing markets will grow quickly.

“Currently, eCommerce already makes up 8% of the overall trading volume in Europe. Depending on the scenario, this share could rise up to 40% in developed countries and up to 30% in today’s emerging markets,” says Rahavendra.

For that to happen, logistics will have to take over the role as an enabler for online retailers even more so than today, he adds.

“In Africa, we are continually noticing the rise of e-tailing on the continent and we are increasingly becoming an advisor to these businesses and partner for success, as opposed to a just a traditional service provider.”

Latest from Transportation & Distribution

#53673151@Petar Dojkic|Dreamstime
Trucking Industry Objects to DOL Rule on Contractors
#64128824@Igor Groshev| Dreamstime
Analysis of Red Sea Shipping Crisis