Indonesian retailers must now seek a permit to sell online

Indonesian retailers must now seek a permit to sell online

Indonesian e-commerce vendors flustered as the law now requires sellers to seek a permit to sell goods online.

Over the past few years, Indonesia has emerged as one of Southeast Asia’s fastest-growing e-commerce markets. Revenue in the Indonesian eCommerce market amounts to US$18,764 million in 2019 and is expected to grow at an annual rate of 25.8%.

In 2019, almost 93% Indonesians reported to have searched for a product or service online, and 86% reported to have shopped online, while 76% of these online purchases were made using mobile devices. A number of factors have contributed to this rapid growth of e-commerce in Indonesia.

The country’s dynamic digital ecosystem, availability of low-cost mobile phones and widespread internet penetration among consumers have led to a significant shift in consumers’ preference towards online buying and encouraged the establishment of plenty of e-commerce platforms in Indonesia. Shopee, Lazada, Bukalapak, and Tokopedia are some of the leading e-commerce players in Indonesia.

Despite such growing popularity of e-commerce among consumers and sellers, the Indonesian government has recently introduced a law that requires all vendors to obtain government permits to sell goods/services online. The law also mandates online marketplaces to store information in local data centers and e-commerce domain names to reflect Indonesia.

However, the new law has not been welcomed warmly by Indonesia’s e-commerce players, who believe that the regulation could highly impact the country’s e-commerce landscape and might create barriers for small businesses to expand online. Seeking a mandatory permit would also mean lengthy procedures and fees, indicating a shift of small and medium e-commerce sellers to alternative platforms like Facebook and Instagram, which are not monitored by the law.

Although the regulation is facing resistance from online vendors currently, the Indonesian government officials assured that this regulation is intended to protect the interests of the millions of Indonesian consumers and businesses. Indonesia’s exploding e-commerce market clearly needs regulations like this to bring about orderliness, transparency, and stability in the long-term growth of the industry.

Locus works with e-commerce players in Southeast Asia to empower them with AI-driven logistics solutions. Check out how we helped Lazada optimize supply chain operations with efficiency and accuracy.

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High logistics costs curb eCommerce growth in India

High logistics costs curb eCommerce growth in India

The World Bank states that high logistics costs are slowing down the growth of eCommerce in India

E-Commerce has significantly influenced the way Indians shop and has redefined the Indian retail industry. The Indian e-commerce market is growing rapidly and is estimated to reach US$84 billion in 2020. However, despite the explosive growth, the World Bank recently reported that eCommerce sales only account for 1.6 % of the total retail sales in the country. On the other hand, in countries like China, revenue from e-commerce makes up to 15% of the total retail revenue

The report which focuses on the key challenges faced by e-commerce companies in South Asia, states that high logistics costs, poor logistics infrastructure, and digital regulations are the primary concerns for e-commerce companies in the region. In a developing economy like India, logistics challenges are pretty obvious.

In the recent past, there has been a sudden rise in tier 2 and tier 3 cities in India, which are high potential markets for e-commerce companies. However, the problem is accessibility to these cities as they are connected with poor rail and roadways. The delivery networks are mostly unorganized, fragmented and chaotic.

Another major problem is the slow adoption of tech-driven logistics solutions by small and medium e-commerce enterprises. It leads to the under-utilization of ground resources such as drivers and delivery agents and inefficiencies in operations. To add to it, last-mile deliveries are becoming highly complex with hyperlocal and next/same-day delivery expectations of customers.

With the help of new-age tech solutions in AI and automation, e-commerce companies can optimize delivery networks, plan dispatches smartly, track shipments as they move and ensure a better last-mile experience to the end customer while reducing operating costs significantly.

Technology is the true game-changer for e-commerce companies to rise above the heat of the competition from multinational giants such as Amazon and fight off deep-rooted logistics problems effectively.

Locus helps e-commerce companies achieve business goals efficiently with proprietary logistics solutions. Visit www.locus.sh to know more.

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Vietnam tops the chart of the world’s fastest-growing economies

Vietnam tops the chart of the world’s fastest-growing economies

Vietnam’s economic growth surpasses India and China, opens doors for modern logistics

A recent GDP growth statistics report states that Vietnam is the fastest growing world economy with a growth rate of 7.31% in 2019. It has surpassed the growth rate of other Asian economies including India and China, which stand at 4.5% and 6% CGAR respectively.

The primary factor contributing to this massive leap in Vietnam’s economic growth is the amount of Foreign Direct Investment coming in from investors around the world, especially the Republic of Korea, Japan, and Singapore. Almost 68% of the total FDI capital was invested in the manufacturing industry and 10.4% in real estate.

Although industries like electronics, food processing, fashion, real estate, and manufacturing dominate the Vietnamese market, tourism plays a significant role in the economy attracting nearly 6.8 million visitors yearly from different countries around the world, making Vietnam the most favorable tourist destination in South East Asia.

Another driving force behind Vietnam’s growing investment popularity is the country’s collection of free trade agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with Canada and the EU-Vietnam FTA with European countries.

However, a major challenge encountered by the region is its high logistics costs owing to under-developed transport infrastructure and inadequate logistics facilities. Higher logistics costs tend to bring down the profitability of import, export, transportation and delivery services within the country. This implies a higher demand for cost-effective and efficient logistics services in Vietnam

AI-enabled solutions are optimizing supply chains of virtually every industry to cut logistics cost and save time. Geocoding algorithms, AI-based forward and reverse logistics solutions, automated vehicle allocation, shipment sorting, etc. are some breakthrough technologies that are transforming supply chains across South East Asia and it’s about time companies in Vietnam switch to AI-driven logistics for greater efficiencies.

Locus provides intelligent logistics automation solutions and expert consulting to bring efficiency, transparency, and consistency in the supply chain. Check out how network optimization can help scale up logistics performance in South East Asia.

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Milk Delivery startups struggling to grow?

Milk Delivery startups struggling to grow?

Hyperlocal milk delivery companies are facing the funding crunch. Can technology save the day?

Hyperlocal delivery is a rising trend in Indian e-Commerce and the demand for on-demand delivery/at-home services is constantly increasing. From ordering food and groceries to fresh meat and vegetables and getting beauty services at home, the hyperlocal market is on the boom. According to Ken Research, the Indian Hyperlocal market is expected to grow at a considerable pace, exceeding INR 2,306 crore by 2020.

The hyperlocal delivery system caters to a limited geographical area with quick delivery of goods as per customer requirements within a short duration of time. Several start-ups have sprung up to meet the dynamic daily demands of the consumer, promising express delivery of orders and quick services at the doorstep.

India is a country that runs on tea and coffee, and hence milk becomes one of the most essential everyday items for almost every Indian household. A number of milk delivery start-ups have also come up in the urban sectors, delivering milk, bread, eggs, and other daily consumables in the busy morning hours.

However, these milk delivery start-ups seem to be struggling to scale up and expand operations due to limited funding. The market is expected to undergo some consolidation in the coming months, owing to poor economics, complex supply chain, and profitability issues, reports ET. External funding is a major challenge, due to which these start-ups are looking for merger opportunities with bigger players or limiting their operations to bring efficiency in the supply chain.

Bengaluru-based milktech startup Doodhwala recently discontinued its operations, selling its business to FreshToHome. Another start-up, Milkbasket is expected to scale down operations and limiting its products to bring down operating costs and improve efficiency in the supply chain. Milkbasket currently delivers milk, bread, eggs, butter, juices, and other daily needs. DailyNinja, another early morning milk delivery service, is looking for a merger with BigBasket.

Startups engaged in the milk delivery business execute as many as 80,000-90,000 orders a day, signifying their need and popularity. However, these companies need a solid strategy for survival and growth. Partnering with tech innovators to bring efficiency in logistics and supply chain operations can help reduce costs and improve performance dramatically.

Locus helps businesses in e-Commerce and hyperlocal delivery optimize logistics with AI-driven solutions, bringing efficiency, transparency, and consistency in the supply chain. Check out how we helped BigBasket optimize route planning and achieve 99.5% on-time delivery.

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Will E-Commerce shake hands with small retailers and Kirana stores?

Will E-Commerce shake hands with small retailers and Kirana stores?

Indian government urges e-Commerce players to make small retailers and Kirana stores part of their growth.

India is among the fastest-growing e-commerce economies in the world. The industry is growing at an annual rate of 51% and is expected to jump to US$ 120 billion in 2020. Unmatched Foreign Direct Investment and uniform implementation of Goods and Services Tax have contributed majorly to this growth story of e-commerce in India.

Furthermore, smartphone usage and internet penetration in India’s semi-urban and rural areas have largely influenced the buying behaviors of consumers, boosting e-Commerce sales remarkably all over the country. Online shopping offers customers numerous choices at competitive prices across a wide array of products, and the convenience to shop anything, at any time and from anywhere with just a few clicks on their computers, tablets, or mobile phones.

India’s E-Commerce growth threat to traditional retail stores?

While it has spoiled the Indian customer for choice, the tremendous growth of e-Commerce is a major threat to traditional mom and pop stores. Many retail enterprises are stepping up by opening online stores and adopting tech solutions to offer e-payment options, quicker deliveries, and better customer experiences. However, small-scale brick-and-mortar stores with limited capitals and infrastructure accessibilities are struggling to keep up.

The participation of niche industries like FMCG in online trading is choking a large number of small Kirana shops and retail outlets to death, owing to tremendous online discounting and significant loss of business.

Government urges E-Commerce enterprises to team up with small retailers

The Department for Promotion of Industry and Internal Trade (DPIIT) has approached e-commerce companies asking them to send plans to work with small retailers, indicating that a policy may be implemented in this interest. With this initiative, the government is trying to address the concerns of India’s unorganized retail industry.

Cooperation from e-tail businesses will help the government in creating a standard framework empowering small retailers to catch up to the rapidly growing e-commerce sector. Such collaborations will also strengthen India’s e-commerce landscape in the years to come. Fulfillment companies in 3PL sector, tech logistics, inventory management, customer support, etc. will also play a major role in putting the two pieces together.

Locus is working towards this vision in association with one of India’s leading fashion e-commerce players. The company was seeking greater last-mile efficiencies, especially in locations where several packages are delivered on a daily basis.

Locus devised a business model that involves local retail stores that offer home delivery services in dropping off the company’s packages to neighboring areas. Partnering with such local Kirana stores in heavy density areas helps save a significant amount of time and effort otherwise taken by delivery agents in finding correct addresses.

In conclusion:

Will e-commerce team up with small retailers and Kirana stores making room for mutual growth? Let us wait and watch! However, e-commerce giants like Flipkart, Amazon, Zomato, and Swiggy haven’t yet responded to DPIIT’s query.

We at Locus are looking to work with E-Commerce companies to drive synergies across the retail ecosystem in India by bringing e-commerce companies and retail stores together, and would be happy to participate in this discussion.

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