Reliance now set to disrupt Indian E-commerce

Reliance now set to disrupt Indian E-commerce

Reliance launches its much-awaited e-commerce venture, JioMart, India’s newest online supermarket. Will it do to e-commerce what it did to telecom?

After disrupting the Indian telecom space with Jio, Reliance has now entered the e-commerce market. The company has launched JioMart, “Desh Ki Nayi Dukan’ its first e-commerce venture piloting in Mumbai, Thane, and Kalyan and plans to expand it to the rest of India soon.

With JioMart, Reliance will cater to the diverse needs of a modern-day Indian shopper, whose cart includes household items like stationery and home utility products beyond just groceries. The online supermarket offers a portfolio of over 50,000 products along with free home delivery, no minimum order value, no questions asked on return, and express delivery promise.

The company has also offered its Jio users to register to JioMart and avail preliminary discounts during the launch period. Mukesh Ambani had hinted the establishment of ‘New Commerce’ at RIL’s 42nd Annual General Meeting, stating significant selling margins for participating merchants. This has opened doors for small-scale brick-and-mortar stores to expand their retail businesses online.

Instead of the traditional warehousing model, Reliance is building an Online-to-Offline business model where it will source orders from the nearest retail stores and deliver it to customers. Reliance aims to connect 30 million offline retailers, with over 20 crore households in the country through this venture.

As it expands to other cities, the company could also potentially partner with local transporters and distributors for efficient last-mile delivery. Reliance is one of the first companies to start working with offline retail stores towards online expansion. The company has set the bar high with Jio and consumers certainly have higher hopes from JioMart for improved e-commerce last-mile delivery.

Will Reliance do to e-commerce what it did to telecom? This hyper-local online supermarket model could set a benchmark for other players in the industry and could potentially disrupt the Indian FMCG supply chain dramatically. JioMart could possibly change the face of e-commerce in India, by making next-day and same-day express deliveries easily affordable for the Indian commoner.

In order to keep up with the trend of same-day and express deliveries, other players in the industry will have to revisit their long-term business strategies. Adopting smart tech in logistics and implementing Artificial Intelligence in the hyperlocal supply chain could save the day for enterprises to sustain the potential threat posed by Reliance’s New Commerce venture, JioMart.

Locus helps enterprises in the hyperlocal market optimize supply chain operations with smart logistics solutions. Check out how we helped BigBasket gain up to 99.5% on-time delivery.

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How India is dealing with essential deliveries amidst an unprecedented lockdown

How India is dealing with essential deliveries amidst an unprecedented lockdown

E-commerce behemoths Amazon and Flipkart have turned their focus on delivering only essentials during the 21-day lockdown in India, due to the coronavirus.

India, after the recent announcement of Prime Minister Narendra Modi, is in the midst of an unprecedented 21-day lockdown. This has resulted in a total clampdown across the vast country, except for the operations of essential goods and services.

This has meant that E-commerce players like Flipkart and Amazon and E-grocery players like BigBasket and Grofers have had to deal with supply chain uncertainties due to the lockdown. The companies are trying to work with the local authorities to get things back on track. Most of their deliveries have resumed in the top cities.

A few states in the country have now started issuing passes to the delivery executives so as to ensure that they can safely deliver items without facing any pressure from the authorities.

Amazon India recently put out a blog stating, “To serve our customers’ most urgent needs while also ensuring safety of our employees, we are temporarily prioritizing our available fulfilment and logistics capacity to serve products that are currently critical for our customers such as Household Staples, Packaged Food, Health Care, Hygiene, Personal safety and other high priority products. This also means that we have to temporarily stop taking orders and disable shipments for lower-priority products.”

The company also added that it would be reaching out to customers to give them a choice to cancel their lower-priority orders and get a refund. These measures came into effect from March 24, 2020.

On the other hand, FMCG giants have written to the government on Tuesday seeking an immediate exemption from movement restrictions, according to a report in The New Indian Express.

“Companies that supply meat, milk and household staples are struggling to redirect the sprawling food supply chain to meet the surge in demand after the government imposed a lockdown to bring the coronavirus pandemic under control,” said the report.

“Seeking immediate exemption from movement restrictions, companies including Britannia, Parle, PepsiCo, Hindustan Unilever, Dabur, Coca-Cola, ITC, Nestle and Mondelez have written to the government on Tuesday through three separate industry bodies,” the report added.

E-pharmacies too are in a spot of bother and are working with the relevant authorities to get things up and running.

The clampdown has sent the existing supply chains of companies across sectors into a tizzy. While the government and the companies are working to ensure that the operations are smooth, the end customers are facing uncertain delivery timings. Hopefully, the processes will become more streamlined soon.

During these demanding times, route planning and optimization are of utmost importance. E-commerce and E-grocery players are also implementing contactless deliveries and cashless transactions to ensure the safety of both the delivery executive and the customer.

Live tracking of ground personnel and smart geocoding will help now more than ever in ensuring the swift delivery of goods.

We, at Locus, have developed an exclusive COVID-19 Delivery Guide to help businesses in logistics and supply chain so as to ensure smooth operations during this tough time. Get your copy now!

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Coronavirus could be the shot in the arm for E-commerce companies across the globe

Coronavirus could be the shot in the arm for E-commerce companies across the globe

With work-from-home and social distancing becoming imperative because of the coronavirus, people, world over, are taking to E-commerce sites to buy their regular supplies.

This period may well tilt the customers’ behavior towards online shopping forever because this is letting them explore E-commerce like never before. For example, most customers might never have used E-commerce sites to buy hand sanitizers. But because of the shortage of hand sanitizers in physical retail stores now, many are ordering the same from online sites.

A recent eMarketer report titled ‘Concerns May Boost Ecommerce as Consumers Avoid Stores’, which quoted a Coresight Research survey, said, “Shopping centers/malls were expected to be the most-avoided places, but more than half of respondents said they would also avoid shops in general.”

This sentiment is leading people to furiously click their mouse buttons to land on E-commerce sites and shop. Why go out, when you can things delivered at your doorstep? And E-tailers and e-grocers have been quick to latch on to this.

Internet behemoth Amazon is blocking all shipments of nonessential products to its warehouse as it is seeing a significant increase in essentials orders due to the spread of the coronavirus, according to a Business Insider report.

The report said, “Amazon said in an email to sellers that it was now prioritizing shipment in the following six categories: baby product; health and household (including personal-care appliances); beauty and personal care; grocery; industrial and scientific; pet supplies.”

If Amazon is riding on the wave to make sure it has all the essentials stocked up, things are no different in India. According to a news report on CNBC TV18, “E-tailing platforms have seen a 15-20 percent spike in gross merchandise value (GMV) in the first 15 days of March compared to February, and a massive 50 percent growth in GMV in categories such as grocery, health and wellness, according to internet-focussed consulting firm Redseer.”

All this frenzied activity means that a huge strain is being put on the E-commerce firms’ supply chain thereby resulting in shipment delays, technical problems, and also labor shortages.

In a recent official blog post, Amazon has said that it is opening 100,000 new full and part-time positions across the U.S. in its fulfillment centers and delivery network to meet the surge in demand.

Amazon will also be paying an additional $2 USD per hour through April. This is on top of its present $15/hour. It is also adding C$2 in Canada, £2 per hour in the UK, and approximately €2 per hour in many EU countries. This move takes its investment to over $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.

An Amazon India blog also recently highlighted the increasing footfalls it is getting on its site, thanks to Covid-19. “As COVID-19 has spread, we've recently seen an increase in people shopping online. In the short term, this is having an impact on how we serve our customers. In particular, you will notice that we are currently out of stock on some popular brands and items, especially in household staples categories. You will also notice that some of our delivery promises are longer than usual. We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders.”

The CNBC TV18 report also added, “The spike in demand has led to staffing firms such as TeamLease getting increasing requests from ecommerce companies to provide manpower.”

Logistics has now become more important than ever for E-commerce firms. In these testing times, logistics can make or break customer satisfaction.

With increased demand, these firms will have to use the right technology to enable same-day and slot-based delivery for important essentials. The right tech platform can help in seamless route planning and optimization. It can also help with an optimal fleet mix to match the increased demand, while keeping in mind traffic, route restrictions, etc. One can also intelligently club orders based on properties such as preferred delivery time slots, priority orders, location preference, and order specifications. More importantly, it is now crucial to keep a close track on data so as to glean insights and quickly make changes, if necessary.

This is indeed the time for both E-commerce and logistics firms to step up and be counted during these uncertain times.

Locus helps you deliver a delightful last-mile customer experience by helping achieve on-time deliveries for your customers and better SLA adherence. You can also reduce overhead costs and increase delivery efficiency with automated shipment sorting and optimized route planning. Try it now!

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Industrial and Logistics leasing in India hits an all-time high of 33 million sq.ft

Industrial and Logistics leasing in India hits an all-time high of 33 million sq.ft

Industrial and Logistics (I&L) leasing in India reached an all-time high of 33 million sq.ft in 2019, according to the American commercial real estate services and investment behemoth CBRE’s recently released ‘India Industrial and Logistics MarketView H2 2019’ report. This is a 30% increase on an annual basis.

Bangalore dominated the leasing activity, followed by NCR and Mumbai. These cities together made up for about 60% of the overall space take-up.

3PL firms cornered almost half of the leasing activities in 2019, up from 36% in 2018 to 48% in 2019. 3PL was followed by E-commerce players (18%), retail firms (11%), engineering and manufacturing (8%), and electronics & electricals companies (4%).

The report said, “Similar to 3PL firms, leading e-commerce players Flipkart, Grofers and BigBasket also leased space across multiple cities, thereby boosting transaction activity of the sector during 2019.”

As expected, the I&L space take-up in 2019 was dominated by small-sized transactions (less than 50,000 sq ft) which held a share of about 42%. The share of medium-sized transactions (50,000 sq ft to 100,000 sq ft) rose from 26% in 2018 to 30% in 2019. The large-sized deals (above 100,000 sq ft) accounted for 28%. NCR, Mumbai, and Bangalore, in that order, dominated the large-sized deals.

Supply addition in 2019 crossed 19 million sq ft, rising by about 78% compared to 2018. About 70% of this supply was reported in NCR, Mumbai, and Chennai. In H2 2019, nearly 8 million sq ft was completed, mainly in NCR, Chennai, and Bangalore, adds the report.

The supply-led I&L leasing in 2020 will still be led by 3PL firms and E-commerce players, along with retail corporates.

These are interesting times as E-commerce players themselves are looking to operate delivery services rather than depending on 3PL partners. With an increasing demand for same-day and slot-based E-commerce deliveries, it makes long term sense for E-commerce players to invest in homegrown resources, thereby giving them better control and visibility.

Another growing trend in this space is the need for cold storage spaces and cloud kitchens. With the proliferation of E-grocers and food tech players, this trend will only increase in the coming years.

With warehousing becoming a strategic operation for online players, supply chain network optimization is the need of the hour. Can you plan where exactly your next warehouse should be, based on your present demand and future projections? Should your warehouse be in the center of the city or in the periphery? Locus’ Supply Chain Consulting helps you do just that.

Companies are also increasingly becoming environmentally conscious, and are looking to do route optimization to save distance and fuel, and are also adopting green logistics practices to do their bit. Locus Dispatcher does algorithm-based dynamic route planning and Locus MotionTrack helps with real-time tracking, insights, and analytics.

Try it now!

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India’s Food Delivery Market about to get Amazoned

India’s Food Delivery Market about to get Amazoned

The Indian food delivery market now has a new entrant who is looking to shake things up and break the duopoly of Swiggy and Zomato in the hyperlocal food delivery market. Welcome, Amazon!

The food delivery market has been under the spotlight for a while now. Zomato recently acquired UberEats, thereby intensifying competition in the space with Swiggy.

Amazon is now gearing to enter the market in India and is planning to pilot in some urban areas in Bangalore, according to recent reports.

Amazon is planning to provide the offering as a part of Amazon Fresh or Prime Now. The platform will be open only to its employees during the trial period and the food delivery option will be available in the Amazon app. After testing waters in Bangalore, Amazon’s food delivery service is expected to be launched in other parts of India as well.

India’s food delivery market is now picking up pace and offers lucrative growth opportunities. At least 61% of restaurants in Delhi, Pune, Hyderabad, Bangalore, and Mumbai offer delivery options, and more than 60% of restaurants have partnered with multiple online platforms to facilitate home delivery.

The E-commerce giant has been planning this venture for months and was working on partnering with restaurants in Bangalore with attractive commission rates. While Amazon’s entry to the food delivery market poses a threat to other platforms that charge restaurants a commission between 10 to 30 percent per order, it opens up more options for the ever-demanding urban customers.

World over, Amazon has been experimenting with new offerings. Amazon Pantry, where customers can order anything from bread, jam, to tissues to even a box of fruits, was recently started in the US. Amazon Prime, has more users than ever, across the globe.

This move into India’s hotly contested food delivery space is being viewed as a part of an umbrella plan to build a product portfolio that will cover everything from food, electronics, and grocery, among others, and enable its Prime members to get the best of the products, all on one platform. To put it in business terms, this will ensure that their Prime members become repeat customers and will never have to leave Amazon for any high-value or daily need products.

India’s homegrown startups Swiggy and Zomato are not far behind either. Both Swiggy and Zomato are heavily investing in Cloud kitchens and are coming up with new offerings like Swiggy Go, an instant package pick up and drop service.

However, its conception stage, many Bangalore-based restaurateurs had concerns regarding Amazon’s delivery terms and conditions. Despite the lower take rate, Amazon’s platform does not cover the cost of delivery, which is an added cost for restaurant owners, Inc24 had reported in September 2019. Some restaurateurs were also not convinced by Amazon’s user dashboard for tracking order histories.

In order to cut through the bar that Swiggy and Zomato have already set in the food delivery space, Amazon will have to step up its delivery processes, offer interactive dashboards and features like real-time order tracking. Fine logistics will be the true differentiator in the food delivery game and it will be interesting to see how Amazon’s food delivery service unfolds.

Locus offers end-to-end logistics optimization solutions to businesses in the hyperlocal delivery sector. Check out how we helped BigBasket achieve 99.5% SLA adherence with smart routing solutions.

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Coronavirus could damage global economic growth says IMF

Coronavirus could damage global economic growth says IMF

The coronavirus, now named Covid-19, could damage global economic growth this year, according to the International Monetary Fund (IMF).

Kristalina Georgieva, the managing director of the IMF said, "There may be a cut that we are still hoping would be in the 0.1-0.2 percentage space." She also added that there might be a sharp and rapid economic rebound that would follow. Kristalina was recently speaking at the Global Women's Forum in Dubai when she made these observations.

The IMF’s managing director is of the view that the full impact of the virus can be ascertained only when it is contained.

The virus, which has killed around 2,000 people, has already made a dent in the business world.

The Hubei province in China, where Wuhan, the epicenter, is located is often called the ‘optics valley’ and houses firms that make components for smartphones and telecoms. According to reports, around 10% of the global smartphone shipments could get impacted. Wuhan’s workforce is a crucial part of the global supply chain for sectors like fashion, pharma, auto, and electronics, among others.

From smartphone manufacturer Apple to car manufacturers like Hyundai and Nissan, the virus’ spread has impacted all their operations. A number of airlines have canceled flights to and from China. If all of this isn’t enough bad news, tourism has dropped too.

To make matters worse, a lot of Chinese factories haven’t opened shops yet, after the Lunar New Year celebrations, thereby leading to a lot of disruption in normal activity.

While ripples are being felt the world over, there really isn’t a number that economists can put on the business impact of Coronavirus. According to Kristalina, during the SARS (Severe Acute Respiratory Syndrome) outbreak in 2002, China’s economy was around 8% of the global economy, but now, it is 19%. This means the business impact of covid-19 could potentially be more severe.

With the situation being very uncertain, businesses world over are concerned about the impact it could cause in their operations and thereby their bottom line. There are also concerns that this could potentially lead to shut down of assembly and supply chain lines across the world due to a lack of China-made components.

All the delay and uncertainty in different sectors have translated to a drop in transportation and logistics too. With supply chains being affected, a lot of last-mile delivery challenges are bound to happen. The reach of the virus is now far and wide, across sectors and countries.

What next?

While the world is reeling under the impact of Coronavirus, all one can do is wait and hope that it is contained soon. According to some experts, the lost sales could potentially be made up once the outbreak is contained. Will it also mean a renewed vigor in logistics once the virus is contained? There is no answer, really. All of this is mere speculation. In this interconnected global world, it really is hard to predict effects accurately.

But, one thing is certain, the covid-19 virus will certainly impact businesses around the world. We can only hope for a scenario that isn’t very bleak.

Locus helps companies manage their supply chains by using artificial intelligence. Locus’ solutions help reduce costs by increasing efficiency, transparency, and consistency in operations. Visit www.locus.sh to know more.

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Alibaba offers a helping hand to combat Coronavirus in China with Green Logistics

Alibaba offers a helping hand to combat Coronavirus in China with Green Logistics

Alibaba is carrying out this operation through its green logistics arm, Cainiao. More supply chain companies in Asia will focus on green logistics in the coming years.

The outbreak of Coronavirus in China has intensified with a death toll of around 1300. The virus is also rapidly spreading to the nearby nations and at least 43,000 cases have been reported worldwide so far, with most of them from China's Hubei province. The WHO has declared a global health emergency and announced that a vaccine for Coronavirus could be available in 18 months.

Meanwhile, Alibaba, China’s leading e-commerce player, has stepped up to fight the deadly epidemic with green logistics. The company has launched an e-commerce platform to connect medical suppliers worldwide with thousands of Coronavirus victims in China. This special B2B platform will source medical supplies from retailers worldwide and provide the supplies to organizations working towards treating the disease.

Alibaba’s green logistics arm, Cainiao, is ensuring that the necessary drugs and medical equipment are shipped to the needy in the most efficient and eco-friendly way. So far, Cainiao has more than 150 suppliers and has delivered medical supplies from over 15 countries in 18 hospitals across the country.

‘Green Logistics 2020’ is Alibaba’s green e-commerce initiative that aims to implement eco-friendly practices of material recycling, green packaging, effective route planning, and delivery methods throughout its global supply chain. This is a joint mission across several entities within the Alibaba Group, including its online retail stores Tmall, Taobao, Xianyu, as well as its on-demand food delivery site Ele.me.

The demand for sustainable logistics is only increasing and it is pushing supply chains worldwide to embrace similar ways of doing business. While sustainable development has been a focus for corporates in developed nations, there has been a significant shift towards eco-friendly business practices, especially green logistics in developing countries across Asia

Companies are taking effective measures in this regard; such as using eco-friendly packaging materials that can be reused and recycled, choosing vehicles that have low carbon emissions, load optimization to ensure efficient vehicle utilization for shipments and route optimization in order to save travel costs by taking the shortest routes, thereby reducing fuel consumption significantly.

The importance of eco-friendly practices in modern-day supply chains cannot be overlooked. Logistics operations hugely impact the environment in several ways. Implementing sustainable transport and logistics strategies can reduce the environmental impact caused by logistics activities including transportation, warehousing, inventory management, packaging, raw materials handling and forward and reverse shipment services.

2020 and the years to come will see more Asian companies in retail, e-commerce, 3PL and distributor services embrace green logistics. In fact, green logistics might become a key differentiator for enterprises in Asia’s supply chain in the near future.

Locus helps supply chain enterprises reduce fuel consumption and minimize carbon footprint with AI-driven Route Optimization solutions. Visit locus.sh to know more.

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The food delivery market battle in India set to intensify with Zomato’s acquisition of UberEats

The food delivery market battle in India set to intensify with Zomato’s acquisition of UberEats

India’s leading food delivery firm Zomato recently acquired UberEats India, Uber’s food delivery offering, in an all-stock deal. This deal gives Uber around 10% stake in Zomato.

This acquisition is the first big consolidation in the food delivery space and the battle is now between Bengaluru-based Swiggy and Gurugram-based Zomato for the top honors. UberEats, according to reports, was a distant third in the race.

What does Zomato really get from this deal?

Zomato will acquire all of Uber’s delivery partners, business deals and more importantly, UberEats’ customers and their order data. The UberEats app will redirect its users to Zomato for the next six months.

“We have acquired Uber Eats India and with this development, we are the undisputed market leaders in the food delivery category in India,” claimed Deepinder Goyal, CEO, Zomato, on the company’s blog.

According to various news reports, these platforms deliver around a million orders daily. And out of these million orders, a sizable chunk comes from the non-metro cities. This is a significant development for these players as the ‘non-metro’ market has so far been nascent and largely untapped and they have put in a lot of marketing and promotional efforts to gain a foothold.

A recent report titled 'Demystifying the Online Food Consumer’ by the Boston Consulting Group (BCG) and Google highlights the massive growth that this industry has witnessed.

The report says, “Macro trends such as rising internet penetration, increasing ordering frequency, favorable consumer disposition, expanding reach in smaller tiers and expanding network of restaurants on Food Tech platforms pan India, continue to drive momentum in the industry. As a consequence, reach of food tech aggregators has grown six times from 2017 to 2019.”

The report also adds, “Riding on the wave of higher consumption in a growing market and maturing dynamics on the supply side, we expect the industry to grow from $4 Bn to $8 Bn in next three years, a massive 25% growth rate.”

The report lays down a potential path ahead for the food tech space. It believes that these players will diversify into several new offerings by leveraging their customer base, delivery and service expertise.

And that is what is exactly happening in this sector. The food delivery companies have already come up with cloud kitchens and are experimenting with new offerings like Swiggy Go, an instant package pick up and drop service.

Swiggy Go directly competes with Google-backed hyperlocal concierge app Dunzo. The idea behind Swiggy’s venture into concierge service is to use the same food delivery fleet to also fulfill pickup and drop service requests and thereby increase the delivery fleet’s ROI and efficiency.

All this melange of activities in the food delivery sector means significant opportunities for allied sectors like logistics. It is amply clear that restaurant discovery will no longer be the only major competitive advantage. What will really matter is the logistics play of these companies.

Better delivery speeds lead to higher customer satisfaction and higher customer satisfaction translates to the stickiness of the app. According to research firm RedSeer’s Food-Tech Market Updates, “Deliveries fulfilled by restaurants have lower delivery compliance as compared to those fulfilled by own fleet/3PL partner.” At the end of the day, customer experience will become a key differentiator.

Adopting smart tech in logistics and implementing artificial intelligence could help in pushing the customer satisfaction levels in this highly competitive food delivery market.

Locus helps companies manage their delivery fleet with smart logistics solutions. Check out how Locus helped frozen desserts manufacturer Rollick save 8% of their logistics cost.

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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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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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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% CAGR 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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