Online Shopping Revolutionising

Logistics & Supply Chain Management

Presented by Cissy Chan

Executive Director, Commercial

Airport Authority Hong Kong

Online Shopping

E-tailer

E-tailer’s perspectiveE-commerce

logistics opportunities

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Online Shopping – When Hurdles Become Edges

Expensive shipping fees

No fitting; can’t feel and touch

Limited product selections

Waited too long to receive it

Nearly everything is available

Where/when to get it all my choice

Bring the fitting room home

“Almost” free shipping

Past Now

Source: “2017 State of Ecommerce Delivery Consumer Research Report”. MetaPack

Shipping Is “Almost” Free

“free delivery”

determined

which website

to buy from

purchased more to

meet the minimum

spending for free

delivery

Who pays for delivery when customers want it free?

E.g. Free international delivery upon spending as low as US$100

59% 73%

How to optimize logistics flow for personalized deliveries?

I Call The Shots On Delivery

chose the

e-tailers over

others due to

more convenient

delivery options

ranked “fast

delivery” as their

top or second most

important delivery

priority

52% 60%

Collection / home delivery

Delivery day / timeslots

Carrier

Eco delivery

Source: “2017 State of Ecommerce Delivery Consumer Research Report”. MetaPack

The Fitting Room Is Now In My Place

Which return strategy works for the business?

buy multiple

sizes/variations

with the intent

of returning

Source: “Ecommerce Returns: Policy, Rates, Best Practices & Statistics (2018 Holiday Ed.), Nick Winkler”

Return Rates

77% of returns come from repeat customers

0%

10%

20%

30%

40%

50%

60%

E-commerce Holiday E-commerce "Expensive" Products

41%

“Everything” Is Available Online

Product Categories for the Most

Recent Cross-border Purchases

What are the logistics requirements for fast-growing categories?

Online Sales of Luxury Goods

0% 5% 10% 15% 20% 25% 30% 35%

Others

Car & motorbike

Baby & child

Household appliances

Computers

House & garden

Toys

Sports & leisure

Jewellery & watches

Books, music & media

Health & beauty

Consumer electronics

Clothing, footwear & apparel

Online Sales of Fruit & Vegetables

Source: “e-Commerce growth & e-Shoppe trends”, International Post Co.; “The age of digital Darwinism”, McKinsey & Company; “Fruit Logistica Trend Report 2018”, Olver Wyman

0%

5%

10%

15%

20%

0

10

20

30

40

50

60

70

80

2016 2020F 2025F

% o

f to

tal

Sale

s in

€b

illio

ns

Sales % of total

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

50

100

150

200

250

300

350

400

2015 2030

% o

f to

tal

Sale

s in

€b

illio

ns

Sales % of total

“Global Buy, Global Sell”

made up to

10 or more

purchases

Nearly 1 in 6 dollars sold online is

cross-border

How to deal with the challenges of cross-border logistics?

21%16%

Source: “2017 State of Ecommerce Delivery Consumer Research Report”, MetaPack; Seabury Consulting

made at least

one overseas

purchase in

last 12 months

7 categories with 2500+ skus

Pay & Collect

Pay & Deliver

E-marketplace

Order ready within 3 hours Ready within 90 mins

Now Future

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Collection

Counter

Delivery

Online Shopping

E-tailer

E-commerce

logistics opportunities

Icon made by Icon Pond, monkik, Freepik, Good Ware, Pixel Buddha, from www.flaticon.com

Expansion Of DHL Central Asia Hub

• One of the three global hubs for DHL

• Expand to increase 50% handling capacity to 1.06 million tonnes per annum

• Investment of US$ 370 million

• Scheduled to commence operation by early 2022

Premium Logistics Centre At Kwo Lo Wan

• Alibaba’s “Smart-hub” in Asia

• Gross floor area of 380,000m2

• An incremental cargo volume of 1.7 million tonnes

per annum when in full capacity

• Investment of US$1.5 billion

• Scheduled to commence operation by mid-2023

E-tailer

Icon made by Icon Pond, monkik, Freepik, Good Ware, Pixel Buddha, from www.flaticon.com

Optimize delivery model

Manage reverse logistics

Online Shopping Revolutionizing Supply Chain

Thank You