Online retail giants recognize business prospects in e-commerce logistics

By Mufassira Fathima, content writer at Allied Analytics LLP.


ecommerce ecommerce logistics global



Mufassira Fathima

 

The pointed success of companies, such as Amazon and Flipkart, is a clear testimony to the exponential growth of the e-commerce industry. The progress of the e-commerce logistics market is also directly incidental to the expansion of e-commerce operations. In addition to this, the rise in the number of third-party logistics (3PL) companies emerging on the market horizon has pushed the growth of the overall industry. With rapid globalization and urbanization, millennials are in possession of increased disposable income, making them frequent customers for e-commerce companies. Not only has this enhanced the scope of the market, but also enhanced the value-added relationships between suppliers and customers.

 

The global e-commerce logistics market is an emergent industry with high stakes involved in it. Several industry giants in the logistics market have forayed into the provision of transportation and warehouse solutions for various online selling platforms. This has improved the overall functioning of the supply chain and enabled in cutting down on the costs for all the parties involved. These factors have augmented the growth of the industry at a global level. The global e-commerce logistics market is touted to earn close to $535,895 million by the year 2022. According to expert analysts at Allied Market Research, this would be feasible with a projected CAGR of 21.2 percent during the period of 2016 to 2022.

 

Embracing robotic technologies for logistics

Ushering in an entire revolution in retail, the entry of robotics technology in e-commerce operations is the next best solution to all hassles. Recent advances in artificial intelligence, coupled with the use of smart next-generation robots in warehouses and delivery, have ensured swift automation of these processes. Retailers and e-commerce business are on the constant lookout for new ways to reduce operations and logistics costs along with a decrease in delivery time. The implementation of robots offers a lucrative, cost-saving alternative to human labor, as they promise superior performance with excellent precision. This is one major factor that has encouraged several business enterprises to collaborate with robot-makers and enhance their logistic efficiencies.

 

For instance, GreyOrange, a big name in the advanced robotic systems scene, has recently entered into a contract with Nitori Holdings Group. The agreement with Japan’s largest furniture and home furnishing chain intends to supply robotic solutions for its logistic operations. Nitori Holdings has a logistics subsidiary called Home Logistics, which is where the robotics systems will be deployed at 34 distribution bases. The Butler robots, provided by GreyOrange is equipped with software that adapts real-time to changing inventory profiles and order fulfillment patterns. By systematic deployment of the Butler robots, the system will result in high productivity and accuracy, thus saving time and costs.

 

Even other e-commerce giants, such as Amazon, eBay, and Alibaba are foraying into Asia-Pacific market to tap the potential promised by these regions. Their arrival on the scene is also significantly marked by their robotic technologies in warehousing and transportation, for attaining better business performances. Other e-commerce retailers are also expected to join in and adopt robotics in their logistics operations for an added competitive edge.

 

Big players tap the hidden market potential

The e-commerce logistics industry offers several untapped possibilities for potential investors and entrants in the industry. Players and logistics businesses are only just beginning to realize the attractive propositions that could turn into money-spinning ventures in the e-commerce logistics market. While North America and Europe already boast of a robust industry, it is the Asia-Pacific and Latin American & Middle East (LAMEA) region that has proved to a lucrative investment pocket. The increase in the number of netizens, who are now actively ordering products through e-commerce platforms, has triggered several opportunities for industry giants and new entrants to establish their presence. India and China are particularly inviting markets, in terms of customer base and revenues to be earned.

 

Companies, such as Amazon, eBay, Flipkart, Alibaba, and PayTM have expanded their ventures in Asia and are taking charge of their own logistics operations, thus giving them the added leverage over other small e-commerce enterprises. Even Paytm has partnered with Flipkart’s eKart for logistic support. It is not uncommon to see online retailers collaborating with domestic and international delivery providers, such as Blue Dart, DTDC, and GoJavas. Giants including Amazon and Flipkart prefer to employ their own logistics solutions, rather than outsourcing, to have better control over deliveries. This has not only ensured a better relationship with customers but also strengthened the efficiency of control over the supply chain.

 

The e-commerce logistics industry is poised for a magnanimous growth in the next few years. With several favorable market conditions that have augmented e-commerce businesses and the emergence of online portals, the logistics industry is bound to gain from such an exponential growth.



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