Tuesday, March 5, 2013

E-commerce are driving the change for logistic--Taking Alibaba as an example

Alibaba Group is China's biggest e-commerce company whose retailing has exceeded 1000billion dollars per year, and is expected to go beyond 3000billion dollars per year over the next few years, which is much more than that of the Gross sale per year of Wall Mart and is taken as a signal of the time of E-commerce coming.

We can observe from another perspective, jumping out of the world of logistic and change the subject of the sentence, what we see is that E-commerc is the power that making change in logistics. It's out of the demand of the super quickly development of e-commerce that the logistics in the near future will experience big change and become one of the most important career.

What is the relationship between ecommerce and logistics? Let's take Alibaba  as an example. This ecommerce giant is growing beyond expectation, but it has its own concerns. The spring festival is the best oppurtunity for merchant and promotion, however these days e-commerce almost stop its service. Because all the transportation is occupied by the people going home. This makes Alibaba understand that one of its most fatal part is logistic which will limited its development in the very near future.

What is the decision of Alibaba? Let's see the report below[1]:

"Alibaba Group, the world’s largest e-commerce company, is planning to build a network of warehouses across China and hopes to mobilize other partners to join in this effort to create an integrated logistics platform that will help elevate the quality of service to Chinese consumers and allow merchants to meet rapidly growing domestic consumption needs. Over the medium term, Alibaba Group and its financing partners will commit between RMB20 billion and RMB30 billion (US$3.01 billion to US$4.52 billion[2]), and Alibaba Group hopes to spark a total investment of more than RMB100 billion (US$15.05 billion1) in logistics development in China by others partners in the e-commerce eco-system"

This work is done in 4 steps: firstly, they will enhance their control of delivery quality through their nowadays existence supply chain management platform(e56.taobao.com) . In this practice they help the merchants manage logistic, build logistic networks and industry code of standard. In the second step, it provided value added service and build an industry level integrated platform which bring warehousing and logistic together. In the 3rd step, Alibaba will build national wide warehouse network which is now the key bottleneck facing both the SCM and ecommerce industry. Lastly it will offer the warehouse facilities to small Chinese Exporters.

[1] Alibaba Group to Drive Major Investment in Logistics in China to Allow Merchants to Meet Growing Domestic Consumption.

1 comment:

  1. Cool post. I always read your blog. The information you have provided about ERP solution for logistics industry. Post is very informative and all the points are very easy to understand. ERP is must needed for our buisness. The modules for logistics industry in eresource ERP provides powerful forecasting functionalities supporting long-range planning and helping to optimize the logistic and warehouse management.
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    Thanks for sharing such a nice post..


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