{"id":5522,"date":"2024-01-04T09:06:26","date_gmt":"2024-01-04T02:06:26","guid":{"rendered":"https:\/\/itifund.com\/?p=5522"},"modified":"2024-10-13T13:37:05","modified_gmt":"2024-10-13T06:37:05","slug":"pick-up-drop-off-a-breakthrough-in-last-mile-delivery","status":"publish","type":"post","link":"https:\/\/itifund.com\/en\/pick-up-drop-off-a-breakthrough-in-last-mile-delivery\/","title":{"rendered":"Pick up & Drop Off – A breakthrough in Last Mile Delivery"},"content":{"rendered":"

\u00a0E-commerce is booming along with the increasing demands of consumers, posing numerous challenges for transport and delivery services to efficiently and conveniently deliver products to customers. In this context, understanding and maximizing the last-mile delivery (LMD) process in Vietnam becomes crucial for businesses.<\/span>\u00a0<\/span><\/p>\n

Last-mile delivery plays a crucial role by providing a unique opportunity to make a positive impression on customers, assist in collecting valuable data for process improvement, and optimize costs. This not only enhances the operational efficiency of businesses but also minimizes risks affecting the consumer experience.<\/span>\u00a0<\/span><\/p>\n

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1. Last-mile delivery and the challenging puzzle:<\/b>\u00a0<\/span><\/h1>\n

Last-mile delivery constitutes about 28% of the total transportation costs and can go up to 53% for on-demand deliveries in Vietnam. This presents a significant challenge in the e-commerce industry and affects the experience of 97% of online shoppers.<\/span>\u00a0<\/span><\/p>\n

According to the Department of E-commerce and Digital Economy, the growth rate of e-commerce platforms in Vietnam is remarkable and is predicted to surpass Southeast Asian countries like Singapore, Indonesia, and Thailand. The market value reached approximately USD 13 billion in 2021, a 5 billion increase compared to the previous year, accounting for over 60% of the total internet economy value and leading in four essential pillars.<\/span>\u00a0<\/span><\/p>\n

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Figure 1:\u00a0Chart comparing Gross Merchandise Volume from 4 different branches of the digital economy in 2021\u00a0(Source: <\/i>KANTAR<\/i><\/a><\/span> 2021<\/span>)<\/i>\u00a0<\/span><\/p>\n

Potential of Vietnam’s e-commerce is supported by several factors, including tech-savvy young population, high internet penetration, income growth, and government policies promoting digital economy development. Over the last five years, the number of e-commerce orders tripled, leading to changes and expansions in services such as logistics, warehouses, and packaging to enhance user experience. Therefore, last-mile delivery plays a crucial role in e-commerce by directly interacting with end customers.<\/span>\u00a0<\/span><\/p>\n

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2. Rapidly Addressing Key Challenges: A Necessity for Progress: <\/b>\u00a0<\/span><\/h1>\n

The first significant challenge of last-mile delivery in Vietnam is fierce competition, with major players continuously investing in the sector. Strategic collaborations between companies like Grab and Vietjet Air or the establishment of fully automated warehouses by GHN contribute to this competitive landscape. E-commerce platforms also aim to shorten delivery times, such as Tiki with two hours, Shopee with four hours, Sendo with three hours, and Lotte.vn with one hour.<\/span>\u00a0<\/span><\/p>\n

The second challenge is underdeveloped transportation infrastructure. Narrow and congested roads in major cities can become nightmares, threatening service commitments. Additionally, transport options in Vietnam are limited, with restricted cargo capacity and high costs.<\/span>\u00a0<\/span><\/p>\n

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Figure 2<\/i>: Traffic congestion and underdeveloped infrastructure (Source: Xay Dung So<\/span><\/a>)<\/i>\u00a0<\/span><\/p>\n

The last challenge is related to customer behavior. In Vietnam, offline payment is preferred in online shopping due to fraud risks. Customers use Cash on Delivery (COD) and Open Box services, allowing them to check and reject products if they don’t meet expectations. However, this method leads to issues like customers rejecting deliveries for illogical reasons, causing losses for shippers and delivery companies.<\/span>\u00a0<\/span><\/p>\n

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3. Embracing sustainability trends with smart technology applications:<\/b>\u00a0<\/span><\/h1>\n

Sustainability is regarded as the future of last-mile delivery, with positive signals of transformation in the development and application of advanced technology trends in this field.<\/span>\u00a0<\/span><\/p>\n

According to the World Economic Forum (WEF) 2020 report, greenhouse gas emissions from last-mile delivery transportation are projected to increase by 32% by 2030. Consequently, the adoption of technology such as unmanned aerial vehicles or a shift to more environmentally friendly energy sources is gaining popularity. McKinsey estimates that by 2022, there will be over 2,000 daily commercial drone deliveries worldwide. In Europe, Amazon plans to invest $972 million and increase its fleet of electric delivery trucks to 10,000 by 2025. In Vietnam, Gojek has announced a collaboration with Dat Bike to utilize electric motorcycles in passenger and delivery services on their platform.<\/span>\u00a0<\/span><\/p>\n

\"Gojek<\/p>\n

Figure 3<\/i>: Gojek collaborating with Dat Bike to deploy electric motorcycles for passenger and cargo transportation (Source: B\u00e1o<\/span><\/i>Tu\u1ed5i Tr\u1ebb<\/i><\/a><\/span>)<\/i> \u00a0<\/span><\/p>\n

Additionally, the Pick-up Drop-off (PUDO) model is gaining attention due to the emergence of many high-applicability startups. In Vietnam, Santa Pocket is keeping up with this trend. Both senders and recipients can easily arrange the timing of the delivery\/pick-up process without encountering daily life inconveniences. The security and safe storage aspect is another significant advantage of SantaPocket. The 24\/7 surveillance camera system and secure locks ensure the safety of shipments, limiting the risk of loss or confusion. Moreover, SantaPocket provides a customer care team available 24\/7, ready to advise and assist when needed.<\/span>\u00a0<\/span><\/p>\n

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Figure<\/i> 3: Santa Pocket \u2013 a smart point-to-point delivery solution (Source: <\/i>Santa Pocket<\/span><\/i><\/a>)<\/i><\/span> \u00a0<\/span><\/p>\n

Furthermore, the last-mile delivery sector is vibrant with some investments flowing into young startups. Zevo, an integrated cold chain and supply chain platform, received an investment from Agility Ventures. According to Agility Ventures, Zevo’s commitment to using innovative electric vehicles and end-to-end sustainable supply chain solutions aligns entirely with the fund’s vision for the future of the logistics industry.<\/span>\u00a0<\/span><\/p>\n

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Figure 4: <\/i>Zevo – a fully electric integrated supply chain and cold storage platform, received investment from Agility Ventures<\/i>\u00a0(Ngu\u1ed3n: <\/i>Entrepreneur India<\/i><\/a><\/span> 2023<\/span>)<\/i> \u00a0<\/span><\/p>\n

Focusing on developing value in all aspects of last-mile delivery, where it benefits all stakeholders, will propel the e-commerce industry in Vietnam further on the path of sustainable development in the future.<\/span>\u00a0<\/span><\/p>\n

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\"ITI<\/p>\n

Th\u00f4ng tin li\u00ean h\u1ec7:<\/h4>\n