E-logistics: foreign rivals crowd busy market
VietNamNet Bridge - The forwarding market has been witnessing a boom since 2012 with the presence of many businesses, from post-based companies to young startups.


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In Vietnam, there are two models of e-commerce delivery service. First,  service with goods delivered within 1-2 days to customers in Hanoi and HCMC, and within 3-7 days in other localities.

Sellers will send goods to delivery staff or leave goods at consignment points. The goods will be gathered at forwarding businesses’ storehouses and then distributed to customers.

The service providers of this kind include Viettel Post, VNPost, SF Express, Giaohangnhanh, LEX (Lazada Vietnam), Giaohangtietkiem, Ninja Van and Giaohangso1.

Second, prompt delivery service. With the service, goods will be delivered within 1-3 hours. Deliverymen will come to get goods from sellers and deliver directly to customers. AhaMove, Delivery Now, GrabExpress (Grab) and UberShip (Uber) are the best known names in the group.

The forwarding market has been witnessing a boom since 2012 with the presence of many businesses, from post-based companies to young startups.

The demand for delivery is expected to boom, especially after the tariffs among ASEAN countries are cut to zero percent, which will help boost trade. 

In mid-July, German Deutsche Post DHL announced the launch of logistics service for e-commerce – DHL eCommerce.

DHL eCommerce is listed among the first group of service providers, while its CEO Charles Brewer said the company still doesn’t have the intention to join the second group – prompt deliverymen.

The market entry of DHL, an enterprise whose 80 percent of revenue comes from B2B transportation, is  a surprise. 

In Vietnam, as estimated by Euromonitor, the revenue from e-commerce in 2016 was $1 billion and from e-commerce delivery accounted for 10-12 percent, or $100-120 million. The figure alone will not attract new investments from DHL.

Analysts commented that DHL targets cross-border e-commerce in SE Asia which is forecast to reach $3.4 trillion by 2020 with e-commerce delivery amounting to 5-8 percent, or $272 billion.

AEC is an attractive zone with population just lower than China and India. According to Nomura from Japan, the B2C and C2C e-commerce revenue in the zone may hit $36.1 billion by 2020 with the CARG of 34 percent. The revenue from e-commerce delivery is estimated to reach $7 billion.

Chinese companies have also been aware of the importance of the market. Alibaba Group launched Cainiao Network in 2013. SF Express, which is called China’s FedEX, has come to Vietnam. It stated that the goods ordered on Chinese wholesale websites would come to Vietnam within 1-2 weeks instead of 1 month as previously.

Brewer said Vietnam’s e-commerce now makes up 1 percent of revenue of traditional commerce and will develop rapidly in the time to come. 


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Thanh Mai

vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, e-commerce, DHL, startups
 
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