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Global e-commerce Logistics 2017

  • February 2017
  • 186 pages
  • Transport Intelligence
Report ID: 2837006

Summary

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Ti’s Origin and Development
Ti is a leading logistics and supply chain market analysis company developed around five pillars of growth:
- Logistics Briefing
- Ti Market Research Reports
- Ti Insight portals
- Ti Consulting
- Ti Conferences and Training

Ti acts as advisors to the World Economic Forum, World Bank, UN and European Commission and have 14 years worth of providing expert analysis to the worlds leading manufacturers, retailers, banks, consultancies, shipping lines and logistics providers.

What Sets Ti Apart?
- Globally recognised and trusted brand
- Global Associate Network provides a multi-country, multidisciplinary and multi-lingual extension to Ti’s in-house capabilities
- More than fourteen years of knowledge delivery to global manufacturers, retailers, banks, consultancies, shipping lines and logistics providers
- Unique web-based intelligence portals
- Interactive dashboard
- On-going and comprehensive programmes of primary and secondary research

e-commerce is cited as an important driver of growth by many logistics service providers (LSPs) and retailers alike. In recent years, traditional ‘store-based’ retailers have had to adapt their offering to counter the rapid growth, and now, dominance of online players, such as Amazon, whilst LSPs have seen a new revenue stream emerge. Even in developed markets, e-commerce logistics is relatively nascent with the structural shift towards higher online retail penetration ongoing. As the market evolves, new logistical challenges are constantly emerging, in last-mile delivery but also with regards to the fulfilment of online sales. Coupled with the fact that growth is rapid - a global 2016-2020 CAGR of 15.6% is expected - many businesses seem to be forever searching for a
comfort zone that they may never find, such is the pace of change.

Not least among those businesses adapting their strategies to remain competitive are the retailers themselves. In this report Ti has presented the supply chain strategies of global and regional retailers practising pure online as well as multi- and omni-channel business models. The profiles examine how these business are responding to national and regional intricacies of consumer demand and the dominance of Amazon. Amazon has changed the way people shop and disrupted operations for many retailers. To compete, retailers have adopted new practices such as retooling their supply chains, adopting omni-channel strategies and investing in technological enhancements. However, even in this respect Amazon is striding ahead with innovations. Development of new technologies is not a new topic within the logistics industry, however, the manner in which technologies have been adapted or adjusted to cope with the demands of crossborder e-commerce, and the growing issue of consumer returns, is of interest. Both of these operations are costly to manage, and
have encouraged companies to innovate their way out of difficulty.

During 2016, and continuing into early 2017, Amazon further blurred the distinction of its identity as an e-retailer and logistics provider. Amazon is expanding and refining its internal logistics operations. To a degree, this is fundamental in order to support its core business of online retail. However, it is instructive to note that other services developed in order to support the business have developed into revenue streams for the company by tapping external customers – such as its ‘fulfilled by Amazon’ platform. This does not mean that the same thing will happen with Amazon's charge into logistics, but it leaves the door open to just that possibility. Global e-commerce Logistics 2017, offers readers valuable insight into the development and future prospects of this market. The key theme examined throughout highlights future e-commerce trends as the disrupter to ‘traditional’ e-commerce logistics. Presented from multiple angles (global and regional, fulfilment and last-mile, and from retailers and LSPs) the report offers comprehensive analysis on e-commerce logistics trends which could provoke further developments and innovations within the industry.

Key Findings
Ti estimates that the global e-commerce logistics market grew by 18.1% in 2016, and has forecast a 2016-2020 compound annual growth rate (CAGR) of 15.6%. Low, expected and high forecast scenarios have been presented.

Asia Pacific, the largest e-commerce region in the world, remains the main driver of global e-commerce sales growth, with the bulk of sales coming from China.

Online retail sales growth in 2016 exceeded 10% in most markets, even developed e-commerce markets such as the US, the UK and Germany. In emerging markets, online retail sales growth was considerably higher.

Even though it is the smallest e-commerce and e-commerce logistics market, Africa is expected to grow faster than any other region to 2020.

B2B e-commerce is colossal, though the extent to which it offers new opportunities for LSPs is questionable.

Cross-border e-commerce sales accounted for 20% of global e-commerce sales in 2015. Per item, it should be expected that e-commerce logistics costs for cross-border shipments are on average higher compared to domestic shipments. It is unclear however whether cross-border shipments are associated with higher logistics costs as a proportion of sales than domestic shipments.

Amazon and Alibaba are manoeuvring to establish themselves as players in the transportation of cross-border freight. Through further incremental actions, these companies will become increasingly influential.

Artificial Intelligence is becoming increasingly pervasive within various points in the supply chain, though as of yet, the technology is limited by the availability of data.

3D Printing is unlikely to ‘disrupt’ e-commerce, though it will have a significant role in the customisation of products.

e-commerce logistics costs structures of online retailers are fundamentally affected by the type of goods they sell, the retail channels through which they sell, the geographies they operate in and other factors. Logistics costs structures of online retailers have been benchmarked to provide insight on how e-commerce logistics costs as a % of sales vary by vertical, retail channel and geography.

Varying retail channels can drive large relative differences in e-commerce logistics costs across countries, though these differences should narrow as omni-channel becomes more important.

Emerging markets appear to be associated with lower e-commerce logistics costs as a % of sales compared to developed markets. This is largely driven by lower labour costs.

The division of warehousing and last-mile costs has been benchmarked for several online retailers and they are broadly consistent across companies.

Store-based retailers have lower logistics costs as a percentage of sales compared to multi-/omni-channel retailers and pure plays. Costs have been benchmarked by vertical sector.

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