The race between e-commerce platforms and delivery parties

E-commerce platforms and delivery parties are both looking for ways to meet the needs of end consumers as quickly and cheaply as possible.

Delivery businesses expand investment to meet e-commerce needs. In the photo: Best Express's sorting center

“Touching the economic pain” of consumers

“Most products on Chinese e-commerce platforms such as AliExpress, Taobao, Temu, 1688… are incredibly cheap. Delivery may be slower, or only allow payment by credit card in advance, but I still accept if the price is 50-70% cheaper than other platforms operating in Vietnam,” said Ms. Ngoc Men, a housewife who is also running a children’s toy business at home.

In the context of economic difficulties and limited income, more and more consumers are sensitive to prices. They turn to Chinese e-commerce platforms such as Temu, Shopee, Lazada, etc. to reduce their “economic pain”, easily hunting for cheap and attractive items. This is something to look forward to for Chinese e-commerce companies, as they aggressively expand globally to offset the gloomy state of domestic consumption.

Therefore, delivery businesses are also continuously expanding their warehouse investments in Vietnam, giving platforms more options.

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It is known that there are 2 units providing shipping services for many e-commerce platforms in Vietnam: Ninja Van and Best Express.

Ninja Van - a shipping company from Singapore, officially entered the Vietnamese market in March 2018. With the ability to meet all delivery needs and a large operating team, Ninja Van has expanded rapidly in Vietnam. Ninja Van is also a shipping partner of "giants" in the e-commerce industry such as Lazada, Sendo, Tiki.

Meanwhile, Best Express was also one of the largest express delivery companies in China. In 2021, the company sold its domestic express delivery business to J&T Express and shifted its focus to other logistics solutions and overseas expansion.

Best Express's subsidiary in Vietnam has just marked 5 years of entering the market with express delivery services and post office franchise models. With a complete service ecosystem, Best Express has expanded its express delivery service network to 63 provinces and cities with more than 700 post offices nationwide, including 600 franchised post offices.

To meet the rapidly increasing demand for transportation, this enterprise has invested more than 50 million USD in building automation systems, warehouse infrastructure, transportation infrastructure and service networks. To date, this unit owns 39 automatic goods sorting centers across the country. The total warehouse area nationwide is up to more than 100,000 m2, with the capacity to process over 2.2 million parcels per day.

The digitalization orientation of logistics activities is also comprehensively deployed by the unit in each stage of operation. At the sorting centers, parcels are sorted and divided by Best Express using an automatic goods processing line with sensors for weighing, measuring, scanning codes, taking photos... recording accurate package information, quickly sorting in half a second for small parcels and 2 seconds for large parcels.

Infrastructure, warehouses, and proper technology investment are the keys to help these names grow. In addition, choosing the right warehouse system and automation technology becomes a key factor, creating leverage to help businesses develop sustainably.

When the floor wants to "embrace" all logistics

The fact that e-commerce platforms invest in logistics themselves is putting a lot of pressure on delivery service companies. This approach helps platforms control operating costs more effectively, commit to receiving goods on time with customers, and helps increase market share.

Typically, Shopee and Lazada are still competing to invest in their own logistics warehouse networks.

Recently, SPX Express (formerly Shopee Xpress) joined hands with Frasers Property Vietnam to start construction of an automated sorting center with an investment capital of 30 million USD in Binh Duong. The center has a total area of up to 106,000 m2. The most advanced automated sorting system will be equipped here. Phase I is expected to be completed and put into operation in 2025.

The business representative emphasized that with a capacity to process 4 million orders per day, the Goods Classification Center plays an important role in the operation chain of SPX Express in the Southern region.

Meanwhile, in 2023, amid the quiet market, Lazada Vietnam is a rare enterprise to announce another huge investment. Also choosing Binh Duong as the "heart" of the entire order journey, at the end of March 2023, this e-commerce platform officially put into operation the new Lazada Logistics Park goods classification warehouse at Song Than Industrial Park, with a total area of nearly 20,000 m2.

Mr. Vu Duc Thinh, CEO of Lazada Logistics, affirmed that everything the company is doing will contribute to improving the experience of buyers and sellers. This also shows that logistics is a long-term investment for e-commerce platforms to stay steadfast in their goals.

According to Mr. Jianggan Li, General Director of Momentum Works Market Research Company, major e-commerce platforms in the region are trying to improve the user experience. Among them, there is a commitment to delivery time. Owning their own delivery network helps these platforms control the process, and at the same time have a data source to optimize operations later.

E-commerce platforms investing in logistics themselves may not help them grow quickly, but they will help them develop sustainably. The difficult purchasing power context forces platforms to introduce policies that are more user-friendly, such as allowing customers to check the goods together or cancel orders even during delivery. Implementing this policy is considered less costly than if the platform owned its own delivery network.

However, analysts also believe that owning a private logistics system does not mean increasing market share. The CEO of Best Express commented that the appearance of many warehouses at the border shows changes based on new business models and business trends. Currently, this delivery name has linked up with e-commerce platforms and partners abroad. The ultimate goal is that the delivery party will provide door-to-door delivery services in the fastest time possible.

Source: https://baodautu.vn/cuoc-dua-giua-san-thuong-mai-dien-tu-va-ben-giao-nhan-d228260.html