3PL On-going Innovations

to e-Commerce Supply Chain Ecosystem of China and ASEAN

Last Mile ASEAN Conference & Expo 2017

Terry Chan
Chairman, Hong Kong eCommerce Supply Chain Association HKeCSC
1615-1700, 28 Sep 2017 Thailand

1 © 2017 Hong Kong e-Commerce Supply Chain Association

Agenda
1 Biography and Company Introduction

2 7 Key Questions and 3 Megatrends

3 E-Commerce Supply Chain Ecosystem – Hype vs. Reality?

4 E-Commerce Supply Chain Ecosystem – Challenges

5 E-Commerce Supply Chain Ecosystem – Opportunities

6 E-Commerce Supply Chain Ecosystem – 3PL Innovation

7 Case Study – e-Commerce Supply Chain Model - China and ASEAN

2 © 2017 Hong Kong e-Commerce Supply Chain Association

1. Biography

•General Manager, 3PL (Lazada •Hong Kong Special Administrative

Crossborder, Alibaba) Region (HKSAR)
E-Commerce •Hong Kong Trade Development

Supply Chain
•Management 3PL (FedEx, S.F. Express,
City-Link, Yamato, Sweden & Danish Advisor Council (HKTDC)
•Asian Pacific Postal Union (APPU)
Post, DHL eCommerce)
•GS1, CILT, City University of Hong
Kong

•Founder & CEO, eC-Post Worldwide Co

Ltd, 2012 •Magazine
Entrepreneur •Chairman, Hong Kong eCommerce Columnist •Consultancy Firm
Supply Chain Association, 2017

•eCommerce Supply Chain

•Topics: (1) Ecosystem, (2) One-Belt-One- •Accelerator
Road, (3) Retail, (4) SEA, (5) Innovation,
Speaker (6) O2O, (7) Postal Starts’ Up •Consultant
•China, Hong Kong, Singapore, Indonesia,
Thailand

3 © 2017 Hong Kong e-Commerce Supply Chain Association

1. Hong Kong E-Commerce Supply Chain Association HKeCSC
Objectives:
About HKeCSC:
1. Build a common platform to share knowledge & experiences
Established in 2017 as a non-profit organization
2. Provide advisory to professional organizations and Hong Kong
 VIP – Senior Management
Special Administrative Region (HKSAR) and around the region
 E-Commerce Industry
 Supply Chain Orientated
 Retail / e-Retail Driven
 VIP Members: (1) Brand owners, (2) Marketplace, (3)
Vertical e-tailers, (4) e-Retailers, (5) Related
 Advisory Members: 3PL, Technology, Financial and
related industries

4 © 2017 Hong Kong e-Commerce Supply Chain Association

1. Lazada (Alibaba Group)
No.1 e-commerce marketplace in Southeast Asia

For Reference Only

5 © 2017 Hong Kong e-Commerce Supply Chain Association
2. Seven (7) key questions to be asked:
about eCommerce Supply Chain Ecosystem?

Critical
Hype Evolution Successful
Factors

Obstacles Opportunities

Future
Technologies Trends

6 © 2017 Hong Kong e-Commerce Supply Chain Association

2. Megatrend 1
3.Cross-border
E-Commerce Ecosystem
Omni-Channel – Evolution
Supply (1)
Chain Development
3,500 Cross-Border e-Commerce
growth 27%
3,000

2,500
Sales (USD billions)

2,000

1,500
Domestic e-Commerce
growth 10%
1,000

500

2017

2018
2016

2019
2014

2015

2020
Source: Accenture – AliResearch (June 11, 2015)

Source: Accenture – AliResearch (June 11, 2015)

7 © 2017 Hong Kong e-Commerce Supply Chain Association

2. Megatrend 2
The generation 3.0 of Retail Ecosystem Evolution and Digitalization
Generation Generation 3.0
2.0

Generation 1.0
One to All to All
All
One to

?
10 8

One 11
9 International

7
Domestic
E-Merchants n China 6

1
Local 2 C
3 4 S S C
S S C
S C C
China
Products Consumer

E-Merchants CB CB

Suppliers ECSites
Brazil USA

All products worldwide for all

consumers worldwide
Local products for Localfor
products
Local productsfor Local products worldwide for
local consumers
local consumers worldwide consumers
consumers For Reference Only

8 © 2017 Hong Kong e-Commerce Supply Chain Association

2. Megatrend 3
Supply Chain Innovation & Collaboration
Cost-competitive, reliable, value-added services

Costs Transit-time Collaboration

Innovation
Critical
Successful
Factors (CSF)

Customer Quality
Experiences Management

9 © 2017 Hong Kong e-Commerce Supply Chain Association

3. e-Commerce Supply Chain Ecosystem
Marketplace
Aspects of e-commerce Parameters
Marketplace Ecosystem

Category Solutions Logistics Solutions

Customer
Delivery (Domestic and Cross-
Domestic & Cross-border
border), Warehouse Orientated
Sellers Solutions Payment Solutions

ERP (Content, Supply Chain) Payment Options

Big Data Application

10 © 2017 Hong Kong e-Commerce Supply Chain Association

4. e-Commerce Supply Chain Ecosystem – Challenges (1)
The main requirements of e-commerce logistics services varies by customer groups
Customer Categories Examples eCommerce service Key logistics requirements

 End-to-end logistics solutions

End-to-end
International solutions  Tailor-made services
brands  Global reach
 Local market knowledge

 Easy to use, self-service platform

Marketplace, small E-fulfillment and
e-merchants delivery  Various integrations
 Cooperate with various 3PL (Warehouse & delivery)

Delivery  Customized solution per market

Vertical e-tailers,
large retailers (Domestic and/or  Low costs on first-mile and last-mile
Cross-Border)  Low cost on fulfillment and trade lanes

 Access to global e-commerce market

End-consumers End-consumer
 Transparency and flexibility in using omni-channels
services
delivery
For Reference Only
11 © 2017 Hong Kong e-Commerce Supply Chain Association
4. e-Commerce Supply Chain Ecosystem – Challenges (2)
INEFFICIENT & Ineffective
LOGISTICS
1. Poor Infrastructure
2. Inefficient Last-Mile
3. Fickle Trade Regulations
4. Customs Clearance
5. Subjective Duty & Tax
Assessment
6. Limited credit
card
7. Damage & Lost
VARIABLE & COMPLICATED NEW LOGISTICS CAPABILITIES
SUPPLIER COMBINATION REQUIRED
1. Lack of System 1. Delivery Time
2. Limited e-Commerce 2. Payment
Experiences
3. Services
3. Lack of Power to
Growth 4. Reverse Logistics
4. Fragmented and 5. Quality of Merchants
Uniqueness Market
5. End-To-End Visibility
6. Capacity
12 © 2017 Hong Kong e-Commerce Supply Chain Association
5. e-Commerce Supply Chain Ecosystem - Opportunities?

Suppliers Intermediate E-Merchants / 3PL Consumers

 Source of  Products  Domestic  Retail Sales

Products Delivery Order
Fulfillment
 Purchase of  Cross-Border  Sales Channel
 E-Commerce
Orders Delivery
Services  Inventory
Management
 Vendor  E-Fulfillment
Management Management  Consolidate
selling
 Manufacturing  E-Commerce processes
Consolidation Services

HongKong
13 © 2017 Hong Kong e-Commerce Supply Chain Association
6. eCommerce Supply Chain Ecosystem - 3PL Innovations (1)

How 3PL conduct On-going Innovations to generate

value in the e-Commerce Supply Chain Ecosystem?

14 © 2017 Hong Kong e-Commerce Supply Chain Association

6. e-Commerce Supply Chain Ecosystem – 3PL Innovation (2)
(1) Integrated Technology Supply Chain Platform
First Mile Sorting Last Mile

Pick-Up Trouble Shooting

3PL Partners
Delivery
Sort Center
Cross-Border B Fulfillment
Delivery
Return
Fulfillment Own Infrastructure

API
E-Fulfillment Platform Reporting &
Analytics
Routing End-To-End
SOP
Logic Visibility
15 © 2017 Hong Kong e-Commerce Supply Chain Association
6. e-Commerce Supply Chain Ecosystem – 3PL Innovation (3)
(2) Global Srategic Partnerships Ecosystem
3PL TARGET
Self vs. 3PL PARTNERS NETWORKS
Core Provider Lighter Logistics
End-To-End Country A Model
Country Specific Country G Country B
Existing Network
Niche Player Expansion
3PL Ecosystem
Domestic &
Small/Medium Country F Cross-border Country C
Location-Specific, COD Delivery
Build Small
Counters

Traditional
Country E Country D
Build Collection
Freight Points
Air/Ocean Trade-lane Specific
E-Platform
16 © 2017 Hong Kong e-Commerce Supply Chain Association
6. e-Commerce Supply Chain Ecosystem – 3PL Innovation (4)
(3) Modular Structures
First-Mile E-Fulfilment (O+D) Last-Mile

Capabilities Infrastructure Capacity

CHALLENGES Performance Seller solution Deliveries
Visibility 3PL Integration Infrastructure

Control Distribution Capacity

COMPETENCES Capabilities Fulfillment Products
Technology Tailor-Made Services Technology

Share NPS Share

KPI Time Respondents Costs
Troubleshooting Country Differentiation

17 © 2017 Hong Kong e-Commerce Supply Chain Association

6. eCommerce Supply Chain Ecosystem – 3PL Innovations (5)
Internet of Things (IoT) - Unlocking massive market opportunity
Internet of things
Connected things
Spending
Worldwide (# of units)
$1.29 Trillion
30.7 billion by 2020
by 2020
75.4 billion by 2025 Source: HIS (2016)

Source: IDC (January 2017)

Generate Value from IoT

 Data collection & remote control via automated devices
 Fast react to real-time incidents, generate insight & actions
Smart Internet Big Data  More efficient utilization of resources
Devices Services Application  Create value-added services
 Increase service quality & enhance user experience
IoT Platform
18 © 2017 Hong Kong e-Commerce Supply Chain Association
6. eCommerce Supply Chain Ecosystem – 3PL Innovation (6)
Internet of Things (IoT)
(1) Integrated Technology Supply Chain Platform
(2) Global Strategic Partnerships Ecosystem
End to End Supply Chain

Order Order Received and Leaving Origin Clear Customs • Arrived at Attempted* Delivered
Created Submitted Dispatched OR Destination Delivery OR
Held at Customs • Processing at Returned
1 2 3 4 5 6 7Destination 8 9

Zoll
Douane

Sellers Destination End Recipients

(3) Modular Structure
Omni- Omni-
Channel Seller (4) First Fulfilment Line-haul Customs Fulfilment (5) Last Channel
Management Solution Mile Clearance Mile Management
Vendor & Sourcing Sortation Delivery Selling & Return

(6) Smart Supply Chain - Routing (6) Smart Supply Chain - Consumerization
(7) Big Data Application
19 © 2017 Hong Kong e-Commerce Supply Chain Association
6. e-Commerce Supply Chain Ecosystem – 3PL Innovation (7)
(7) Big Data Roadmap
Unique Competitive Advantages

Supply Chain Zoning

Integration

Purchasing Manufacturing Logistics Sales

Assessment

KPI

20 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (1) - Pilot Area for Cross Border eCommerce
郑州(Zhengzhou)--E贸易(eMaoe) 天津(Tianjing)--跨境⼀一步
www.emaoe.net 达
Started Operation from July 15,
http://www.tjeport.gov.cn
2013 上海(Shanghai)--跨境通
Started operation from
Model: The only pilot area visited www.kjt.com
Nov 11, 2005
by President Xi with his expectation Started operating from Dec 18,
Model: bonded import
of “Purchase from Globe, Sell to 2013
the Globe” Model: Direct purchase import,
bonded import, general export
Nov 16, 2015 SH gov’t announced
re-establishing a new cross border
ecommerce platform open to
重庆(Chongqing)--跨境购物e点即成 register user.
(Cross border)
www.cqkjs.com
Started operation from Jan 28, 杭州(Hangzhou)--跨境⼀
2014 一步达
Model: First multi-model pilot www.kjeport.com
area in China Started operation from
May 20, 2014
Model: bonded import,
direct purchase import

广州(Guangzhou)—跨境易(KuaJing YI)
www.kjy.cn 宁波(Ningbo)--跨境购
Project planed since Oct 15, 2013 www.kjb2c.com
Started operation from Jan 14, 2014 Started operation from Mar 26, 2014
Model: Retail Export, Bonded import, Model: Import B2C pilot model, General
direct mail B2C import, personal effect import, postal
tax consolidation payment.

深圳(Shenzhen)--前海(Qianhai)
www.szceb.com
Started operation from Sep 9, 2014
Model: bonded import, pre-
registration, customs supervise
WHS, category verification, list
verification, foreign exchange final
settlement
21
福州(Fuzhou)，平潭(Pingtan)--跨境购
Website is under construction
Announced on Aug 7, 2015
Model: direct purchase import,
bonded import, general export
Source: kcw & associates
© 2017 Hong Kong e-Commerce Supply Chain Association
7. Case Study: China (2) – Inbound eCommerce Supply Chain Model

22 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (3) - Zhengzhou Crossborder Bonded Zone

23 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (4) - Zhengzhou Crossborder Bonded Zone Location

Center of China, areas can be

reached within 48 hours

Europe

Rail service from

Zhengzhou to Hamburg,
Germany, only needs 12
days (faster than sea- Zhengzhou
freight)

• Key developed city

• Worldwide
connections to
export packages
• Save time & costs

24 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (5) - Zhengzhou Crossborder Bonded Zone - Products

 Cosmetics
 Health
 Baby Products
 Apparel

25 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (6) - Zhengzhou Crossborder Bonded Zone – Order

Consumers can place the online

order simply to scan the QR
code on the products

26 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (7) - Zhengzhou Crossborder Bonded Zone – Country
Hall
Australia

Canada UK

27 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (7) - Zhengzhou Crossborder Bonded Zone – Company

28 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (8) - Zhengzhou Crossborder Bonded Zone – One Stop Ops

Warehousing Pick & Pack

Smart system to sort

packages to the right
courier

Pass to Courier Company Pass to Customs – X-Ray Clearance

29 © 2017 Hong Kong e-Commerce Supply Chain Association

6. Case Study: China (9) - Cainiao Network (1)
2014, China the 11.11 Global Shipping Festival Data Computing
world’s biggest
express delivery
company Electronic Geo-Based
Shipping Address
Over 70% of express Label Database
parcels in China are
handled by Cainiao
Ecosystem Dynamic
Routing
2015, 467 million Algorithm
delivery orders
were generated in
24 hours during the
11.11 Global 4-6 160m
Shipping Festival 30% Hours
Times
94% were
Speed of Dispatch Efficiency of Efficiency of
dispatched within Delivery Delivery
7 days 30 © 2017 Hong Kong e-Commerce Supply Chain Association
6. Case Study: China (10) - Cainiao Network (2)
Co-working Ecosystem

Over 2000+ 50 million

Covers 224
logistics services villages in
countries
providers China

31 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: China (11) – Cainiao Alliance

Cainiao Alliance at
Guangzhou China

32 © 2017 Hong Kong e-Commerce Supply Chain Association

7. Case Study: SEA – Collaborating Model: Supply Chain Optimization

Embedded 3PL relationships / Innovative Partnership Model in Indonesia

Last Mile Strategy Last Mile Portfolio

1. Delivery Niche
Network
Back UP
2. Last Mile
Hubs Postal

Core Providers
3. Fulfillment
Centers Own

33 © 2017 Hong Kong e-Commerce Supply Chain Association

Conclusion - Key take away
1. Megatrends to follow:
1. Omni-channel Supply Chain Development & Strategy
2. Retail & Supply Chain Ecosystem Evolution and Digitalization
3. Supply Chain Innovation & Collaboration

2. eCommerce Ecosystem – Customer Orientated

3. Disruptive Technologies vs. Back to the basis – Build on Business Rule

4. Technology & Innovative platform

5. Global Strategic Partnerships Ecosystem

6. End-to-End Modular Infrastructure

7. Big Data Roadmap

34 © 2017 Hong Kong e-Commerce Supply Chain Association

Contact

Thank you for

your attention!

Terry Chan
Chairman
Hong Kong e-Commerce Supply Chain Association
Email: ckft@yahoo.com
Skype: Terry7205

35 © 2017 Hong Kong e-Commerce Supply Chain Association