According to a research report from BI Intelligence, the 5-year CAGR for e-commerce in China is only at 10% and may soon reach saturation point in terms of consumer growth. On the other hand, regions such as India, Southeast Asia and Latin America offer huge opportunities, with CAGR at 31%, 32% and 16% respectively till 2021.
In line with these statistics, Chinese e-commerce giants like JD.com and Alibaba have taken big strides to expand, especially in Southeast Asia, as we reported earlier.
Unsurprisingly, the intensifying competition has led to another battle – to utilize the most cutting-edge of technologies to ensure robust logistic backbone for faster delivery times and better services to boost ‘’retail as a service’’ or ‘’new retail’’, coined by JD.com and Jack Ma the founder and executive chairman of Alibaba respectively.
While Alibaba started with an asset-light approach, JD.com has been building a proprietary logistics network, building warehouse and hiring large fleets of deliverymen to serve its customers all over China.
The latter has long started to take big steps towards logistics automation.
For instance, last year in June, JD.com started its launch of robot delivery service across many university campuses in Beijing.
By the end of 2017, the company started to research into autonomous delivery vans to boost delivery efficiency by unmanned vehicles via partnering with two local carmakers.
JD’s ultimate goal will be to leverage on artificial intelligence, big data, Internet of Things, robotics, unmanned vehicles and blockchain to support a seamless experience for both online and offline customers. This is ‘oddly’ similar to its archrival’s ‘new retail’ vision.
Alibaba, on the other hand, has its own logistic arm – Cainiao Network.
At the end of May last year, the logistics arm of Alibaba announced its 1 million investments into its courier network to strengthen its artificial intelligence technology for its push for smart delivery vehicles.
The biggest challenge yet is seen by both the giants’ willingness to invest billions to slash delivery times below 72 hours, offering convenient services for their customers. Drones and robots will be the proposed solutions.