The GDC Blog
Last week, McKinsey and The Economist both published reports on the e-commerce revolution occurring in China, McKinsey’s China’s e-tail revolution and The Alibaba Phenomenon from The Economist. They are both great pieces on this topic and discuss leap frog innovations occurring in retail commerce. However, I was reminded of another recent article in The Wall Street Journal about last mile delivery infrastructure being the Achilles’ Heel of this phenomenon, Scooters Rule as E-Commerce Grows in China.
I appreciate the attention to the practical aspect of logistics because I saw first hand that a common delivery agent in the country was what I called “two men and a truck.” The WSJ article mentioned Alibaba’s recognition of this extraordinary challenge and its pledge to invest $15 billion over the next decade.
China has basically skipped the stage of retail commerce maturation that involves physical infrastructure build-out such as a nationwide bricks-and-mortar store footprint and distribution center networks. E-commerce has fast become the primary go-to market channel. Physical delivery of goods and the information services facilitating it are poised to receive a lot of attention to sustain the sector’s growth.
Developing a domestic small package transportation infrastructure is expensive and challenging, as evidenced by the failed attempt by DHL in the U.S. market. This is especially true when consumer residences are a key destination. In China, I expect that government-ran firms like China Post (and EMS unit) and Sinotrans are also growth bets and innovations related to postal/parcel delivery like this blog has discussed before will emerge.
Global Data Consortium
For businesses that need to know the identities of their customers all over the world, we provide a single access point to local, high-quality reference data via our cloud-based platform.
Copyright - Global Data Consortium