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E-commerce fostering changes in logistics industry
By Yang Yang ( chinadaily.com.cn )
2011-July-29

Beijing - The booming consumer e-commerce market in China will lead to changes in the operational mode of the logistics industry, according to Roland Berger Strategy Consultants, the world's fifth largest consulting company, in a report released recently.

The conclusion is made based on the five development trends of e-commerce market in China, including continuous and strong growth of the market, expansion of geographic distribution of the consumer, concentration of the product categories, and diversification of the service needs of the end customers.

The e-commerce market in China has experienced a compound annual growth rate (CAGR) of 90 percent since 2008, starting with a total size of 128.2 billion yuan ($19.9 billion). The B2C market grows especially fast with a CAGR of 47 percent. In the coming three to four years, it will outgrow the larger C2C market with an estimated total market size of 770 billion yuan in 2014.

Roland Berger estimates that the most popular online shopping categories will still be consumer electronics/home appliances, apparel, electrical and print publications, which account for 73 percent of the total B2C online shopping value. The consumer electronics/home appliances purchases grow the fastest.

Geographically, in the future, more inland consumers are expected to shop online, with the improvement in infrastructure such as Internet coverage and issuance of bank cards in those regions. In the past two years, the top 10 online shopping cities were mostly coastal ones including Shanghai, Hangzhou, East China's Zhejiang province and Nanjing, East China's Jiangsu province.

As for customers, the current major online shoppers are students and people with stable jobs aged between 18 and 40. They have relatively high demand for logistics, including delivery time and return service, the report said.

The development trends mentioned above will demand new operational mode for the logistics industry.

Logistics players not only need to select appropriate cooperation modes for specific customer groups, but also should build an appropriate business model factoring in their own advantages and target customer groups.

While B2C players are launching innovative service, the logistics players should break through traditions to enhance the innovation in value-added service to meet consumers' diversified needs, such as personalized packaging, payment on delivery, open-box acceptance, and partial acceptance and partial return in delivery.

 

 
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