Vietnam has a lot of potential for e-logistics development

According to Redseer1, 86% of Vietnamese consumers will maintain or increase online shopping after Covid-19, opening up the potential for e-logistics.

The e-Logistics or electronic logistics industry is considered 5PL logistics. It means logistics combined with e-commerce. In Vietnam today, this industry is relatively new, with much potential for development, but businesses still face many difficulties.

Regarding the online retail of goods, the Vietnam E-commerce Association (VECOM) said that the volume of parcels sent through the delivery service increased by 47% in 2020. The leading delivery businesses are all orders growth from 30-60%, including Ninja Van – an e-logistics company with investment capital from Singapore, this company grew by 200% (up three times compared to 2020).

VECOM also said that the scale of e-commerce has grown at an average of 30% per year from 2016-2019, from 4 billion USD in 2015 to 11.5 billion USD in 2019. The increase will maintain at 29 % in 2020-2025, reaching 52 billion USD in 2025.

As the logistics industry of e-commerce, the prospect of e-logistics is associated with the growth rate of the e-commerce market. Shipping costs are estimated to account for about 10% of business revenue. According to the Association of Service Businesses, the physical size of the e-logistics market is also worth billions of dollars.

Potential for foreign e-logistics businesses

Agility’s “Emerging Market Logistics Index 2021” report ranks Vietnam in the top 8 of the world’s highest-growing logistics markets. With this attraction, the race for e-logistics (e-commerce logistics) in the country is becoming more exciting with many dynamic enterprises.

In this race, domestic brands currently account for 20% of the logistics market share. The remaining 80% of the flow of goods is in foreign enterprises with advantages in capital and technology, including Ninja Van Group from Singapore. This firm has successfully raised $ 578 million in a Series E round and is planning an IPO next year.

The logistics of e-commerce

E-Logistics has its characteristics with small value orders, a large number of orders, many types, tight delivery schedule and high accuracy requirements. In this area, technology plays a vital role.

This industry has also begun to apply artificial intelligence or robots to perform several services, such as packing or unloading goods from containers, loading and unloading goods in warehouses and yards.

Meanwhile, Vietnam’s logistics service providers apply technology to daily work at a low level, mainly using electronic customs declaration software and geolocation technology, email, and essential internet.

According to data of the Vietnam Logistics Business Association (VLA), currently, about 50% – 60% of enterprises are applying from 2 to 17 different logistics services, depending on the size and nature of the service of each enterprise.

Since May, after the quarantine in many provinces and cities due to Covid-19, Ninja Van said that many organizations highly appreciated the unit for maintaining a stable performance in operation strategy and personnel, contributing to the clearance of goods between spacing.

“With a capacity of more than 300,000 orders per day and new capital, we are implementing trade stimulus activities, helping sellers to ensure ‘transportation, receipt intact’ in the last shopping quarter of the year.” Mr. Phan Xuan Dung shared more.

(Source: vnexpress)