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E-Commerce: The Latest Big Driver of Change in Log

10:32am 11th February 2018

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Reports show that E- commerce industry is driving growth opportunities in the logistics sector. Experts projected that by 2030, the e-commerce industry will boom to $300 billion, driving a massive logistical growth as key players within the business begin to associate e-commerce in their trades.

E-commerce comes into two dimensions, business-to-business or more commonly known as B2B and business-to-consumer, otherwise known as B2C.

B2B is a business model focused on selling products and services to other businesses while B2C is the direct process of business transaction between a company and the consumer.

Both models have distinct advantages to logistics as it changed the traditional ways of supply chain processes. Formerly, the logistics of a product starts with the producer. Merchandises are transferred to distribution centers then go along a string of retailers and finally, to the consumers. Note that placement of goods are in bulk orders. Conversely, e-commerce has immensely changed this process as products are being shipped per consumer’s order, usually two to five boxes maximum and are expected to arrive directly to the purchaser within 24 to 48 hour time frame.

In the traditional supply chain, consumers are restricted to the availability of goods in the market. Therefore, the consumer’s behavior is partially determined by the range of available products. This is so unlike e-commerce of which consumers can place an order of any product they require/need/desire and the consumer behavior is not restricted by the availability of goods any longer.

E-commerce is now considered the latest big driver of change in logistics. Inevitably, it has demanded new systems and mechanisms in the industry. As e-commerce booms alongside logistics, the need for flexibility will certainly be paramount in the coming years to determine suitable logistics solutions to a specific user group and product.

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