The link among e-commerce, e-payment and logistics has existed for the past 15 years but it is still loose and has not brought into full play its existing strength and resources.
Logistics services in Vietnam are developing at a high speed, an average of 12-14%/ year, contributing 4-5% to GDP. However, logistics cost compared to Vietnam's GDP is currently at 16.8% - relatively high compared to the Asia-Pacific region, equivalent to about 40 billion USD.
“To reduce the above cost, one of the important measures is to use technology”, said Mr. Dao Trong Khoa, Vice President of Vietnam Logistics Business Association (VLA).
The VLA survey in 2018 showed that the technology application level of companies in the industry was still low but improved significantly, from 15-25% in 2016 to about 40% in 2018 depending on the type of services.
Compared to other industries such as media and retail, the digital transformation of logistics industry is still quite slow. But this difficulty is also a great market opportunity for startups to participate in solving difficult problems.
“One of them is the problem of solving the triangle relationship of E-commerce – E-payment – Logistics”, said Mr. Nguyen Huu Tuat - Chairman of FastGo Company.
According to Mr. Tuat, this is a relationship that has existed for 15 years. In particular, all three areas mentioned above are closely linked and mutually changing, changing habits and shopping behaviors of consumers both on Internet and in retail stores.
FastGo leader took an example, previously e-commerce shipping was dependent on carriers that could take up to 3 days to receive goods, but since the motorbike taxi technology appeared, it has taken only 30 minutes for delivery in the city. It has exploded the development of e-commerce through social networks, making it easy for anyone to sell quickly.
On the logistics business side, these units rely heavily on national infrastructure for transportation, road and air transport means, new technologies and warehouse operating costs, gasoline prices, fees and taxes, urban congestion are also a major obstacle to building logistics solutions and services.
“Therefore, to change and develop the logistics industry, it requires change and development at the level of national infrastructure development, the responsibility of the Government, ministries and departments”, said Nguyen Huu Tuat.
Accordingly, logistics enterprises are facing a big challenge in the stage of digitalization and digital transformation. If it is not timely, it can be replaced by technology enterprises engaged in logistics with new models by applying technology and connecting redundant resources, Grab as an example, it has occupied the domestic shipping market share of big players like ViettelPost.
The electronization and digital transformation are mandatory for logistics businesses to keep pace with the development of the commerce industry in general and e-commerce in particular. Application of information technology will help increase the customer experience of buyers and sellers, track the status of order shipments, use robots to automate warehouse operations, use AI to optimize journeys and the plan…
The digital transformation and the enhancement of technology application are also the way for domestic logistics enterprises to maintain their market share before the fierce market encroachment by foreign enterprises.
Mr. Tuat affirms FastGo is a technology enterprise, not a logistics enterprise. “We apply technology to connect resources and help electronicize logistics operations for businesses. We provide the platform for taxi businesses to operate more efficiently, provide management tools to help businesses save transportation costs, said FastGo Chairman.
In fact, technology startups are having a strong impact on the logistics industry, both supporting and threatening logistics with new business models, and also a pressure for traditional businesses to change.
“For FastGo, we focus more on transporting people instead of transporting goods that are fiercely competing among traditional carriers, e-commerce platforms and foreign companies. We offer a number of special transportation services for e-commerce platforms, i.e. delivery of VIP gifts, transporting passengers and gifts for very high demand on Tet holiday. Or transporting people and luggage to the airport for high-class customers”, shared Mr. Tuat.
FastGo Chairman reaffirms that the startup’s strategy is to provide specialized transportation services to niche markets where competitors do not directly do, compete or confront, but will be a platform and services that contribute to diversifying the service ecosystem in the logistics industry.