Những đặc điểm và thách thức đối với logistics trong thương mại điện tử
Kỷ yếu Hội thảo quốc tế “Thương mại và phân phối” lần 2 năm 2020
NHỮNG ĐẶC ĐIỂM VÀ THÁCH THỨC ĐỐI VỚI LOGISTICS TRONG THƯƠNG
MẠI ĐIỆN TỬ
THE CHARACTERISTICS AND CHALLENGES OF LOGISTICS IN E-COMMERCE
Lê Thỵ Hà Vân
Đại học Quy Nhơn
Email: [email protected]
Tóm tắt
Sự phát triển mạnh mẽ của kỹ thuật công nghệ trong những năm vừa qua kéo theo sự ra đời của hệ
thống thương mại điện tử như là một kênh phân phối trong bối cảnh kinh doanh hiện nay. Thương mại điện tử
phát triển nhanh chóng trên mọi phương diện và là một trong những kênh tiềm năng để doanh nghiệp đạt được
lợi thế cạnh tranh. Theo đó, logistics trong thương mại điện tử được đặc biệt quan tâm. Tất cả các hoạt động
logistic được áp dụng trong môi trường thương mại điện tử cần phải được sửa đổi theo nhu cầu đặc biệt của
cách mua bán phức tạp này. Bài viết này phân tích các đặc tính của logistics trong thương mại điện tử, được
điều chỉnh để cụ thể hoá trong việc đặt hàng sản phẩm, quản lý hàng tồn kho, lưu kho, phân phối và đóng gói
các sản phẩm được giao. Sự có mặt của một hệ thống logistic nhất quán là rất cần thiết để thương mại điện tử
diễn ra một cách hiệu quả. Thông qua thương mại điện tử, người tiêu dùng mua bán thuận lợi hơn; và do đó kỳ
vọng nhiều hơn về tốc độ và sự tin cậy của việc giao hàng. Bản chất của thương mại điện tử đã thay đổi cách
thức hoạt động của logistics truyền thống và mang lại những thách thức mới trong việc đạt được hiệu quả của
hệ thống logistics. Bài viết này cũng thảo luận những thách thức tiềm ẩn của logistics mà doanh nghiệp phải
đối mặt khi tham gia vào kênh thương mại điện tử.
Từ khóa: Các đặc điểm, logistics, thách thức, thương mại điện tử.
Abstract
The development of technology in many recent years leads to the creation of e-commerce - as a
distribution channel in contemporary business conditions. E-commerce is increasingly boosted in all aspects
and is one of the potential possibilities for enterprises gaining competitive advantages. Accordingly, logistics in
e-commerce is especially considered. All logistic activities applied in the e-commerce environment need to be
modified to the special needs of this complex way of buying. This paper analyzes the characteristics of logistics
in e-commerce which are customized to specific product ordering, inventory management, warehousing,
distribution and packaging of products delivered. The existence of a consistent logistics system is very essential
to facilitate efficient e-commerce. Through e-commerce, customers are more convenient in transaction; as a
result, the users of logistics service in e-commerce have much greater expectations regarding speed and
reliability of delivery. The essence of e-commerce has changed the way how traditional logistics operates,
which brings new challenges in gaining efficiency of the logistics system. This paper also discusses the implicit
logistic challenges that enterprises will face as participate in e-commerce.
Keywords: characteristics, challenge, e-commerce, logistics.
1. Introduction
The rapid development of technology in recent decades has completely changed the trading
system around the world. Globalization brings an explosion of consumer needs, liberalization of trade,
and competitive advantages of operating in global markets. Companies are forced to think and act
globally to survive in a dynamic environment like e-commerce. In this context, firms must be more
and more flexible and reactive to anticipate and to adapt to such changes. E-commerce has appeared as
indispensable in the context of more and more technological revolutions in recent years. Accordingly,
e-commerce has increasingly dominated the global market and has much more strong points compared
to traditional commerce. E-commerce is booming with the development of a new business model and
will be continuously boosted in several decades. The success of traditional commerce or e-commerce
has a significant contribution of logistics factors. Trade logistics facilitates trade in particular and for
the economic development of a country in general. As e-commerce is becoming more and more
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popular and becoming a competitive advantage for businesses, logistics for e-commerce has gained
special attention from manufacturers and distributors. Accompanied by increasing pressure on logistics
systems, supply chains, distribution and retail channels, as well as factories and warehouses. All
logistic activities applied in the e-commerce environment need to be modified according to the special
needs of this complex way of buying and selling. This indicates an inevitable result that the logistics
system of e-commerce must be adjusted and have a huge difference compared to logistics for
traditional commerce. Fast and easy ordering of customized goods over the web has raised the
expectations of fast, reliable and convenient delivery among consumers. This story of great
expectations is repeated in the world of Business-to-Business e-commerce as well. (Gaonkar 2010)
With e-commerce, consumers want faster delivery time, delivery on time, commitments to transporting
goods safely, tracking and locating easily and conveniently in checking goods or exchanging returned
goods, etc.
The struggling to change the logistics system from traditional commerce to e-commerce for
many businesses is now an urgent need. The more quickly identify the characteristics of logistics for e-
commerce, the sooner businesses are switching to e-commerce trading, the sooner they will gain a
competitive advantage compared to other enterprises in the same industry.
This article presents the characteristics of logistics systems applied in the field of e-commerce
and presented potential challenges in logistics that businesses may face when they want to enter a new
but very fierce competition.
This study is divided into five parts. Section 1 is the introduction. Section 2 explains the
necessity of the logistics system in commerce generally and in e-commerce in particular. Section 3
describes the characteristics of logistics activities in electronic commerce. Section 4 shows the implicit
challenges of logistics system in e-commerce. The final section is the conclusion.
2. The important role of logistics in E-commerce
In the world, there are some definitions of logistics. According to Council of logistics
management (USAID | DELIVER PROJECT 2011): “Logistics is the process of planning,
implementing and controlling the efficient, effective flow and storage of goods, services and related
information from point of origin to point of consumption for the purpose of confirming the customer
requirement”. This definition clearly points out the inherent nature of logistics and it conveys that
Logistics is concerned with getting products and services where they are needed whenever they are
desired.
Logistics is defined as the broad range of activities concerned with effective and efficient
movement of semi-finished or finished goods from one business to another and from manufacturers
/distributors /retailers to the end consumers. The activities include freight transportation, warehousing,
material handling, protective packaging, inventory control, order processing, marketing, forecasting,
and customer service. (Gaonkar 2010)
The function of trade logistics is to provide low-cost logistics services and a high ability to
meet customer requirements to promote domestic and foreign trade and national economic
development. Well organized logistics activities will bring high added value to trade through the
implementation of transport and delivery of goods just in time and the right place. Accordingly, that
will reduce the cost of inventory. Trade logistics services through information control that reduce the
delay and cost of goods circulation in the stages of goods purchase - shipping - payment of goods
within supply chain management is a goal. of trade facilitation of the country and each business.
In a study related to e-commerce, (Gurau, Ranchhod et al. 2001) formulated four hypotheses.
All of which was confirmed by their study, which considered the relationship between e-commerce
and logistics systems.
a) Most of the Internet business transactions still depend on a physical logistics system.
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b) The online offers will be primarily directed to the national/regional markets which have a
well-developed logistics infrastructure.
c) The development of online commerce has to be complemented by the implementation of a
physical logistics system.
d) The companies which already have a physical logistics system are in a good competitive
position to successfully exploit the Internet business channel.
The main role of logistics is to provide timely and efficient delivery of products so that the
customer is satisfied and becomes the firms’ faithful customer. Today, online shoppers have the
powerful tool of social media in their hands. They simply have to post on social networks about their
experience, and this can make or break a company’s image. In today’s competitive market conditions,
retailers have to put in the best efforts to bring customers the best satisfaction. Some of the largest e-
retailers have implemented same-day delivery to woo customers who can’t or won’t wait for even
next-day service. (For instance, Tiki.vn - Vietnam has recently provided the delivery in the same day
ordering for some cities like Ho Chi Minh city or Hanoi city). Some retailers offer free or low-cost
shipping for many products. An online consumer is looking for attractive pricing and hassle-free
delivery of products. An exceptional product delivery experience is critical in not just winning but
retaining clients. So, it is in the best interest of the firms who are joining e-commerce in entailing
professional logistics services which would result in faster growth, success and dynamism for the
company. It is clear that logistics plays a key role in getting competitive advantages for firms. A good
implementation of e-commerce logistics will bring much more successful opportunities.
3. Characteristics Of Logistic Activities In Electronic Commerce
3.1. Implementation of Orders in E-Commerce
Ordering products in electronic commerce is the first step in this particular complex logistics
process. Customers first select the product on the website, then they create an electronic order which
normally includes personal data such as name, e-mail address, phone numbers for electronic
communication and verification, address for delivering, method of delivery which will determine the
time of disposal of the product, method of payment (cash, credit card, digital wallets, etc.) and similar
information. Most electronic stores use authentication, by setting a single question to a potential
customer or printing the order of letters and numbers in a field. Transferring selected products in the
electronic basket and confirming payment and delivery, the customer orders the product. (Lekovic and
Milicevic 2013)
After the order has been confirmed and the data is filled out by customers, the customers
receive at least one verification email from the online website he or she has registered to purchase the
item. The email asks customers to verify that the information they have filled in is correct and asks
them to decide whether to pay by credit card, purchase account or payment upon delivery. Sometimes
online stores also call customers directly to verify information instead of sending an email.
3.2. Inventory Management in E-Commerce
One of the crucial activities of marketing logistics is planning and inventory management
(including in electronic commerce). It is extremely difficult for sellers to accurately predict
customers’ demand because the world is not perfect and inadequate information. Stores always
maintain inventory to decrease the risk of shortage in commodities which leads to the fall of the
number of faithful and new customers.
The complexity of inventory management in e-commerce is reflected in the fact that it is
performed in the global market because the seller can not predict who will be a customer, nor how
much the demand for the product. It seems almost impossible to determine the optimal level of
inventory, because the demand for a particular product in one period may be small, while in the future
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may exceed the available quantities (Lekovic and Milicevic 2013). In this segment, it is important to
follow demand impulses and respond adequately to changes so that in case of declining demand there
could be easy to find a way to sell the number of inventories (through discounts, sales with a similar
product, as a present with the new version of the same product, etc.).
Retailers experience many inventory management challenges. Customers and Internet
customers in particular, impatiently expect the prompt delivery of services and products. Additionally,
retailers are also challenged by demand fluctuations. Businesses have to account for demand
fluctuations caused by seasonality and product popularity. Reverse logistics is one of the greatest
challenges that Internet retailers have to perfect. Reverse logistics is a process in which a producer,
supplier, or retailer methodically manages product returns for possible resale, recycling,
remanufacturing, or disposal. Retailers and e-retailers with brick-and-mortar or click and mortar
operations have a tremendous advantage over e-retailers that use third party distribution methods, also
known as drop-shipping, in reverse logistics. Online retailers experience more product returns than
brick-and-mortar retailers. Because of this challenge of high product returns, the management of
reverse logistics is crucial for survival (Snyder 2009).
Many retailers decide to outsource the reverse logistics process due to the sophistication in
classifying returned products. There are many logistics companies in the world that do a good job of
classifying returned products. Returned products have to be organized into distinct categories to see if
they can be reused or disseminated into smaller pieces to see if their components can be reused in
different products.
3.3. Warehouse Management in E-Commerce
The traditional model of the warehouse economy envisages the possession of a warehouse, in
which stocks and/or finished goods are to be found that are subsequently offered on the global market
and sold. In this model, a trading enterprise acquires goods from the supplier in order to become
owners of the aforesaid goods and subsequently sell and dispatch them to the client. (Grabowska,
Sukiennik et al. 2016).
E-commerce logistics system includes offices, centers for consolidation of orders and sending
ordered goods, warehouses, customer service and software development centers. (Lekovic and
Milicevic 2013).
In a study of (Grabowska, Sukiennik et al. 2016) in Poland, the authors show that the
possessing your warehouse area is particularly commonplace among online shops in which with
regards to the high level of daily trade quantitatively speaking, it is required to have a high level of
availability of products “at arm’s length”. The decision to have your own warehouse is conditioned by
a multitude of factors. Entrepreneurs first and foremost during the process of counting the costs of
maintaining a warehouse must remember not only about the variable costs but also about the costs of
ensuring an appropriate warehouse infrastructure, as well as the costs associated with the physical
possession of goods. Moreover, one of the most important issues is also the specification of the
number of warehouses that shall ensure the appropriate level of service for the clients.
Generally, the warehouse of an electronic seller has a single central computer that collects
information on the location of the goods and trail maps. Each employee handles PDA device that
controls the condition and location of the goods in the warehouse. During one day of work in the
warehouse of one of the global electronic sellers, an employee can move dozens of kilometres per day
in the affairs of placement and distribution of goods. The common practice of electronic sellers is
hiring a part-time worker in distribution centres, and thus lower labor costs.
Especially, using robots in warehouses management is an outstanding innovation in e-
commerce activity. Amazon pioneered the use of robotics in its e-commerce warehouses with Kiva
robots. Many companies in the USA, Europe and Asia have since been set up to exploit this
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opportunity and now manufacture robots for use in fulfilment centres around the world. In the longer
term, it is anticipated that functions such as product packing will also be conducted by robots, leading
to fully automated fulfilment centres (Bogue 2016).
3.4. The distribution in E-Commerce
The role of distribution in e-commerce is reflected in the transmission of the ordered product to
the place of delivery specified by the customer. Transportation in electronic commerce is primarily
related to the delivery of ordered products to the customer's address. The distribution channel has some
changes compared to the distribution channel in traditional trade. The total order is divided into a
number of smaller delivery units to transport and disperse individual orders. Due to the convenience
and ease of ordering and paying for products, e-commerce customers are setting new requirements for
product distribution, such as faster delivery, allowing in tracking, locate shipments during delivery,
deliver goods at fixed times that customers request. Therefore, carriers need to provide a more
sophisticated and flexible level of delivery services.
Regarding the distribution of products in e-commerce, there are some differences depending on
the type of product that is ordered. (OECD 2001)
• For some products, there is no physical distribution (such as digital products, software, digital
content, information, etc.);
• For many products that can be ordered electronically there is already physical distribution (eg.
ordered wallets are distributed through the existing fast delivery service to home address by post.)
• For some products, there is no physical distribution channel, and it is necessary to develop new
modes of transportation and delivery (eg. delivery of fresh food requires a completely new means
of transportation that would not compromise the quality and freshness of the product).
The citation below show the differences between classic and e-commerce distribution systems:
"In the past, the classic distribution systems sent cases to a store. The store opened the cases,
took the units out and put the units on the shelf. Then customers walked through the aisles with
shopping baskets and picked up what they needed," says Zelikovsky, a former director of logistics at
Seattle-based Amazon.com Inc.
Zelikovsky, who designed Amazon.com's worldwide distribution network and claims it can
handle 1 million shipments per day, says, "In e-commerce, there's a different value proposition. Your
distribution centre becomes your store."
3.5. The Packaging in E-Commerce
Regarding the packaging of the product during shipping, there are three main aspects of
packaging including:
Protection - helps to protect against damages during transport and transit;
Presentation - gives the first impression of the product which help customers to have good
emotion before experiencing product;
The cost of packaging – has an influence on the decision on the type of transport.
Packaging can make a difference in whether the consumer has a positive rather than a
negative experience with your brand. Ultimately, it may be the deciding factor in repurchase intent for
a product.
More products are being sold in e-commerce channels today than ever before, yet many
consumer products are still packaged with the traditional retail transaction in mind. Factors in moving
products from retail to e-commerce packaging (apart from sales volume) include cost, sustainability,
and how an item is purchased (Dennen 2013).
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The decision on packaging involves assessing which of these functions of packaging is more
important for electronic seller and the customer. On the one hand, it is necessary to take into account
the damage that may occur during transportation of the product, on the other hand, there are costs that
would result in an additional packaging and protective packaging. It is necessary to take into account
how the product is packed, how will be manipulated and from what needs to be protected in the
manipulation. Packets, sent to the customer in electronic commerce, are usually small and very light.
Very easy packs are easily manipulated, it might be expected that products in them could be damaged
in handling, so it is necessary to have adequate protection. If the packet of product is sent out of the
country, it can be assumed that it will change means of transport, which increases the likelihood of
falling, the impact of weather conditions, moisture and other external factors, from which the product
must be protected.
4. Implicit challenges in E-commerce
Similar to traditional commerce, e-commerce cannot eliminate delivery or service to customers.
Therefore, e-commerce also exists logistics challenges related to the following processes/areas:
Inventory management
As mentioned in section 3, sellers get troubles in inventory management because of the
difficulties in predicting future demand. Moreover, small firms do not usually have the capital to own
their inventory because of high fixed costs. Backend software for e-commerce applications is also
costly to integrate with front-end applications making it more difficult for small firms to carry
inventory. Product size also contributes to the decision-making process of which strategy to utilize.
The larger and heavier the product, the greater the inventory costs. Large, heavy products take up a lot
of space and are more costly to hold and distribute. Therefore, the larger and heavier the products, the
more retailers are inclined to utilize the drop-shipping strategy (Steinfield, Adelaar et al. 2004,
Randall, Netessine et al. 2006).
Inventory management has never been an easy task, especially when firms join e-commerce
platforms. Sellers will have to commit to a number of goods in online stores and must be regularly
updated, avoiding the situation out of stock in real store but still have commodity on the online store.
For some online sale sites, the penalty applied for updating the wrong balance of the product
(the customer can still book but actually out of stock) is very heavy, the shop owner may be deducted
points, reduced the incentives or not shown products in priority positions.
Delivery
An arising problem from home delivery is that the customer is not always at his home. (OECD
2001). Many customers expect to receive goods at fixed times on the day of delivery, many of whom
did not notice that they would be absent on the day of delivery. This makes delivery to the place
without the recipient, wasting time and cost of the seller when waiting, or transporting goods to the
intermediate destination or worse, returning to the point of delivery in the area before contacting the
customer and re-delivery at a later time.
Another challenge lies in the transport and delivery of these parcels on time using logistics
facilities. Meanwhile, natural disasters and political instability hinder logistics in many areas of the
world. This reduces the seamless flow of the business and thus affects profits.
Many e-commerce companies get confused whether to take help of third-party logistic agencies
or do this whole task themselves. Moreover, finding a premier or reputed third party agency also incurs
cost and research. The substandard performance of a third party agency can impact logistics and ruin
the whole goodwill of an eCommerce business. As such, it is a challenge to employ the right logistics
agency with the right amount of budget.
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5. Conclusion
Along with the deep changes in technology, traditional logistics is radically changed in
conditions of electronic commerce. Logistics system must be suitable to all characteristics of electronic
commerce, needs to provide and maintain a value for which customer has decided to buy in an
electronic way, rather than in the traditional way. The fact is that the users of logistic services in
electronic commerce are easier than before in order, selecting commodities, payment, etc. and
therefore, they have much greater expectations, in terms of speed and reliability of delivery. All
logistic activities applied in the electronic commerce environment need to be adjusted to the special
needs of this complex way of buying. In that way, it is essential to be considered, that all specific
logistic activities take different principles of functioning in terms of electronic commerce. Moreover,
firms intend to join the e-commerce market will face many challenges in which inventory management
and delivery are more considered. Having a good preparation for inventory management and delivery
which is suitable for e-commerce will facilitate firms do e-commerce successfully.
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3. Gaonkar, N. V. R. (2010). "e-logistics - Trends and opportunity.pdf." The Logistics Institute – Asia Pacific.
4. Grabowska, B. S.-., et al. (2016). "PROCESS OF WAREHOUSING ON E-COMMERCE MARKET."
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5. Gurau, C., et al. (2001). "Internet Transactions And Physical Logistics: Conflict Or Complementarity?"
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