With 75 years of operation, and owning the largest network with 2,650 post offices and 24,800 delivery routes nationwide, VNPost is enjoying more advantages than any other competitors in the delivery industry. However, the rise of companies specializing in e-logistics (e-commerce logistics) has posed a threat to the dominant position of the oldest player in the industry.
"Without digital transformation, the physical scale will be a challenge in the coming time because the facilities of many companies in logistics industry are not in line with their rapid development in." Mr. Vu Kiem Van, Information Technology Director of VNPost shared in a recent seminar.
Unlike the global supply chain which was interrupted by the pandemic, the demand for logistics, especially e-Logistics in Vietnam, has been increasing thanks to Covid-19 and the development of the digital economy. "Demand for postal delivery will increase due to the development of e-government and the digital economy. We are facing fierce competition in the last mile delivery segment," added Van.
“Last mile delivery” is a technical term describing the delivery of goods to the final destination. This segment is currently experiencing a vibrant development because several startups and foreign giants have entered Vietnam to provide the service for transportation of goods for e-commerce.
The August’s "ASEAN Logistics Market" report made by the Vietnam Industry and Trade Information Center - Ministry of Industry and Trade stated that even when the epidemic is under control, ASEAN consumers, who are relatively younger and more dynamic than those in other regions of the world, will want to explore and experience new potential services offered on online shopping platforms.
"This increasing demand for e-commerce will contribute to increasing e-Logistics volumes over the next 2-3 years" the report predicts.
According to a survey by Redseer1, about 86% of Vietnamese consumers will maintain or increase online shopping in the post-Covid-19 period. Although the proportion of inhouse logistics services is increasingly attracting attention of logistics service providers, third-party logistics services (3PLs) are expected to account for more than two thirds of the share in the regional e-Logistics market.
The e-Logistics competition has the participation of several dynamic players. In addition to domestic names such as VNPost, Viettel Post, and AhaMove, international "giants" such as Grab, Gojek or LalaMove have also set foot here. In particular, Grab, Gojek, LalaMove, AhaMove and Bee compete each other in the instant delivery segment.
Mr. Van informed that VNPost is undergoing digital transformation. The company has applied Big Data, AI and crowdsourcing. In addition, they have also launched Vmap, which is useful for the delivery industry, and invited customers to use comprehensive platforms to manage e-commerce.
“Our biggest customer on this platform has an average monthly revenue of about VND 10 billion. We expect that there will be more products and services on this platform”. Mr. Van said that they have 500,000 e-commerce partners, most of whom are small household businesses.
Mr. Pham Huu Ngon, CEO of AhaMove, said that his company is delivering about 100,000 parcels per day. He believes that the market is growing very rapidly.
Like its competitors, AhaMove has also found many ways to develop its services. It has applied technology to build single-line solutions to launch 2-hour and 4-hour delivery services, which are designed to be as cheap as day-to-day delivery. This delivery service provider has also offered virtual assistants for drivers and provided platforms for customer understanding and logistics management.
“When the data is huge enough, we will provide customers with insight service based on Big Data. For major customers, “saas platform” (web-based cloud solution platform) will be offered to their own drivers. At peak times, they can use our drivers.” explained Mr. Ngon.
Associate Professor Dr. Ho Thanh Phong, Rector of Hong Bang University, who is in charge of Logistics and Supply Chain Management, assessed that Vietnam's logistics market is increasingly vibrant and highly competitive.
The four factors that help create such development include world’s major logistics companies that have entered Vietnam’s market, domestic enterprises that have been reformed, increasingly developed logistics technology and expanding e-Logistics.
However, according to a survey conducted in July and published on September 17 by IDG, more than 50% of respondents said that they found software provided by logistics companies is not really innovative. Along with that, 37% informed that service providers lack interaction and customer care through social networking channels and email.
Source: Ministry of Industry and Trade, vnexpress
Translated by VietnamCredit