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Online retailers and logistics providers are collaborating on technology “ecosystems” to further propel booming cross-border e-commerce sales in China and South-east Asia.
Last week, US-based forwarder SEKO Logistics signed a deal with Alibaba.com Hong Kong to join its “OnePartner” programme.
The initiative aims to create a “new foreign trade ecosystem” by providing localisation and personalised export processes for small and medium enterprises in Hong Kong and Taiwan.
On the sidelines of TPM Asia in Shenzhen last week, SEKO Logistics president-elect James Gagne told The Loadstar the deal would help develop cross-border logistics.
“Alibaba’s strategy is less about building significant infrastructure and more about building networks – it’s more about collaboration, which is what we’re seeking,” he added.
In South-east Asia, e-commerce marketplace Lazada, – recently acquired by Alibaba – is also focused on building logistics ecosystems.
“We want to create the leading logistics ecosystem in South-east Asia,” said James Chang co-founder and chief operations officer at Lazada Crossborder in Hong Kong.
“Our goal is not to be the largest logistics company; we’re an e-commerce firm, but the ecosystem helps us improve service levels and capacity in the region, which is very fragmented from a logistics perspective.”
Lazada currently has 75 logistics partners covering its key markets of Indonesia, Malaysia, Thailand, the Philippines, Singapore and Vietnam, and operates five major distribution centres and 11 fulfilment centres.
According to Mr Chang, South-east Asia is the fastest-growing internet region, with 480m users expected to be connected by 2020, a year when 60% of its population will be under 35.
He added: “In South-east Asia, only 3% of all retail purchases are online compared with 14% in China. However, we think there’s big potential for the region to leapfrog China, due to the speed of the infrastructure growth and the demographics.”
From SEKO Logistics’ perspective, technology collaboration is the key to enabling cross-border e-commerce, said Mr Gagne.
“The growth in cross-border e-commerce trade cannot be decoupled from the omni-channel shopping experience. We believe the future is not being a one-stop shop logistics company with assets all over the world. We prefer to be asset-appropriate.
“It’s not about being everywhere, it’s about having the right partnerships, with technology at the heart of that to create the best consumer experience.”
SEKO recently added 100,000 sq ft of warehousing and fulfilment capacity in Hong Kong to provide an e-commerce gateway for customers targeting China’s online consumer market, which is forecast to see spending exceed US$1 trillion in 2017.
Mr Gagne noted that expectations on logistics providers were evolving beyond shipping costs to supporting revenue growth.
As an example, he said, SEKO’s tracking portal allowed retailers to retain their brand on the tracking and delivery portion of their website, which in turn enabled them to retarget customers and monetise the page views through ad-revenue.
“We’re focusing on how to create revenue opportunities for a customer. The old way of thinking about logistics is ‘how do you cut my costs, or how do you get my last-mile deliveries down by 10%?’ – something like that. But in this case, we’re saying ‘we’re going to show you how to measure revenue you can generate from customers using our portal’.
“And that’s a great conversation to have with a customer, because then you’re talking about quality of revenue growth and not just costs.”