What is e-logistics service and what are its prospects?

More and more businesses are participating in providing e-logistics services.

Potential market

Lazada is the first e-commerce enterprise to have its own distribution company - LEX. However, realizing the increasing demand for e-commerce in the world and Vietnam, Lazada decided to separate LEX into a separate company. In addition, in early 2017, Lazada invested in 3 large warehouses in Ho Chi Minh City, Da Nang and Hanoi with a total area of ​​22,000 m2 and a network of 34 distribution centers nationwide; building a closed chain for e-logistics services but still not meeting the demand. According to this enterprise, proactively establishing an exclusive company to provide e-logistics services will help the enterprise proactively manage resources and service quality, thereby providing customers with the best service.

The boom in demand for online shopping and home delivery in Vietnam in recent years has been a great opportunity for e-logistics service providers to develop. For businesses with large sales, building their own logistics services is an effective choice. In 2017, the country had more than 50 businesses participating in providing e-logistics services. Along with Lazada, consumers have gradually become familiar with brands in the e-logistics field such as: Fast delivery, Grab Express, Speedlink, etc.

In addition to last-mile delivery, e-logistics companies are also establishing drop-off points, helping buyers and sellers receive or send goods near their homes at any time. For example, Fast Delivery Company aims to increase the number of drop-off points to 1,500 nationwide in 2018, helping buyers and sellers easily have a drop-off point near their homes, serving the needs of delivering and receiving goods.

However, not many e-commerce enterprises in Vietnam are able to invest in their own logistics services, because in addition to developing a delivery team, the pressure on warehouses is very large. Accordingly, enterprises must have a gathering point with a fairly large area to import, check and export goods. Not to mention, with hundreds of thousands of product types, classifying, storing and preserving according to specific requirements for each different product type is also a big challenge.

Great opportunity

The opportunity for businesses providing e-logistics services to develop is still quite large because two decisions of the Government on improving competitiveness for this industry have come into effect and will soon come into effect.
Specifically, Decision 200/QD-TTg dated February 14, 2017 of the Government on the action plan to enhance the competitiveness of logistics service enterprises in Vietnam by 2025 has been taking positive steps, focusing on creating favorable conditions for the development of Vietnamese logistics enterprises. With support in information technology, human resource training, cost reduction for enterprises... This decision is expected to help Vietnamese logistics enterprises in general and e-logistics in particular improve their competitiveness in the coming time.

Notably, the Prime Minister has signed and issued Decree 163/ND-CP regulating logistics services business. The Decree, which takes effect from February 20, 2018, is expected to create favorable conditions for foreign enterprises to participate in the development of e-logistics in Vietnam. Specifically, the Decree clearly states that if meeting the prescribed conditions, foreign enterprises can establish enterprises or contribute capital to participate in areas such as freight transport services under maritime transport services (except domestic transport); container loading and unloading services under maritime transport support services; freight transport services under inland waterway transport services; freight transport services under railway transport services; freight transport services under road transport services, etc.

The e-logistics market is estimated to reach 200 million USD by 2020, contributing positively to the country's overall growth.