A survey of e-commerce floors in Southeast Asia shows that operational design has not kept pace with growth due to the rapid increase in cargo traffic and reduced staff hours during the pandemic.
Report “Impact of Covid-19 on transportation” co-produced by iPrice Group and Parcel Monitor collected and analyzed data of 1.4 million e-commerce orders in Southeast Asia during an epidemic. The report shows that although Covid-19 accelerates the growth of e-commerce exchanges, it poses a challenge for the e-commerce transportation industry in Southeast Asia.
According to a report from Google, the e-commerce sector of Southeast Asia witnessed strong growth right before the pandemic. The growth rate exceeded nearly 600% in just 4 years, from 5.5 billion USD in 2015 to 38 billion USD last year. Not stopping there, it is forecasted that the e-commerce sector will exceed 150 billion USD by 2025.
According to Mr. Richard Wong, vice president and head of IT department in Asia – Pacific, research consulting firm Frost & Sullivan, the social gap in the pandemic phase promotes the development of e-commerce floors, especially in the food and household goods group. Online transactions for groceries and food in Southeast Asia rose from 50 to 400% in just two months from March 2020.
Several e-commerce exchanges have seen total value of goods increase by at least 50% during the same period. E-commerce site Lazada reports online grocery service Redmart has three times as much weekly sales in Singapore.
Surveys from iPrice and Parcel Monitor showed that the average delivery speed of e-commerce exchanges in the period of 4-5 / 2020 is 2.8 days, nearly 1 day slower than the average speed before the pandemic.
Dr. Jeroschewski Arne Jeroschewski, Founder and CEO of shipping tracking company Parcel Perform, commented: “The demand for online shopping will continue to increase in the near future. There will be many opportunities for new companies in the logistics industry to capitalize on the growth of e-commerce.
However, the scale of rapid growth comes with objective shortcomings. Results from the iPrice survey showed that, on average, during the social gap period of April and May, e-commerce delivery time in Southeast Asian countries increased 52%, reaching an average speed of 2.8 days/order. This was nearly a day slower than the average pre-pandemic delivery time.
In addition, packages are cumbersome as shopping needs shift from compact fashion or handheld devices to bulk canned foods, kitchen equipment, and office equipment. At the same time, an increase in the amount of goods in each order makes parcels cumbersome than before.
On the other hand, during the period of social gap, the number of hours the courier works is reduced to ensure safety. The slower delivery speed has affected the customer shopping experience in the past period.
According to representative of Parcel Monitor, in the period of April and May, the number of customer complaints about service quality and number of lost parcels increased much more than in the pre-pandemic period.