Rising ecommerce calls for efficient, reliable logistics

The 2018 United Nations Conference on Trade and Development (UNCTAD) Business-to-Consumer E-commerce Index ranked Kenya in position seven in ecommerce uptake in Africa, and 85 globally. Leading the Africa pack were Mauritius, Nigeria, South Africa, Tunisia, Morocco and Ghana coming in that order. Globally, Netherlands took the lead having improved from fourth place in 2017.

While Africa needs to boost internet penetration to grow e-commerce, it also needs to get more of its existing internet users to trust the online market for making purchases, secure servers, bank accounts, and a clearly marked and mapped address system.

The UNCTAD report further estimates that that the B2C e-commerce market in Africa was worth about $5.7 billion in 2017, which corresponds to less than 0.5 percent of GDP, far below the global average of over 4 percent. However, the uptake of eCommerce in Africa has seen online shoppers surge at an annual rate of 18 percent, which is way above the global rate of 12 percent.

There is no doubt that ecommerce is fast emerging as a new frontier in Africa and in the global market. As eCommerce continues to grow, retailers need to expand their distribution networks, build more fulfillment centres, and leverage more on third-party logistics (3PL) partners. At the same time, online retailers must place greater focus on conveniently locating their fulfillment centres close to their markets to facilitate faster deliveries.

Reliable and solid logistics and supply chain interventions are at the heart of successful ecommerce. This will ensure that the sector thrives and sufficiently satisfies customer demands for availability of goods purchased, timely, safe and secure deliveries exempt from breakages, bends or losses as well as favourable return policies.

In Kenya, ecommerce players heavily rely on third parties who provide storage and shipping services. These services can build or break the customer experience as they make their purchases online. The ecommerce sector is a new frontier in business that calls for close synergies between the ecommerce players and bac- end logistics to ensure a positive customer experience from that first click to eventual delivery.

Logistics players play a critical role in supporting the ecommerce process by shipping, managing stock levels as well as making final deliveries to end destinations. The inventory must therefore be secure, and the services offered must be efficiently and safely delivered yet offer best value for money to ensure the customer appreciates the value of goods bought. A solid and long-term partnership between logistics players and ecommerce partnerships will ensure growth and expansion for both parties at the end of it all, the e-customer emerges the winner.

Several systems have been adopted to integrate ecommerce retailers and logistics entities to allow for a seamless process. Today, warehouse management systems have been adopted that enable inventory owners to view their stocks on demand. For ecommerce players, these systems allow them to view available stocks, guide pre-order decisions as well as ease the stock taking process. Logistics players are also able to receive online instructions of goods that need to be stocked out as well as received and report the same via bar code systems and other stock movement detectors. It is also an industry best practice to provide the tracking numbers to customers in their confirmation email so they can keep track of where their package is.