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Infographic: Chinese E-commerce Market & What Australian Businesses Can Learn for an Successful Online & E-fulfilment Strategy

Recently we’ve been writing articles relating to e-fulfilment strategies and solutions for Australian companies. But how does the online market look in countries other than Australia? And what can we learn from them?

Read on to discover how China’s e-commerce market is evolving into the largest in the Asia-Pacific region and how Australia is following the same path.

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China’s e-commerce industry

China’s e-commerce market is now a trillion dollar business and looks set to grow year by year as it becomes the preferred purchasing method for China’s growing middle class. The following infographic shows the e-commerce market in Asia and specifically the global powerhouse nation of China plus five interesting facts demonstrating why 90% of China’s B2C purchases are made online today.

5 Facts about the Chinese e-commerce industry

  • Asia dominates global e-commerce: Over 40% of internet users around the globe live in Asia. Regarding e-commerce, 36.2% of worldwide B2C e-commerce sales will come from Asia in 2014 and are expected to increase to 39.7% in 2016.
  • When we say Asia, we mean China: 6 out of every 10 dollars spent online in Asia comes from China.
  • Estimated B2C e-commerce sales in the Asia-Pacific region will grow from $383.9 billion to $1052.9 billion in 2017. China is the main attributor to this number, with e-commerce sales increasing from $181.62 billion in 2013 to an estimated $439.72 billion in 2016. The next biggest increase within the Asia-pacific region is Japan, $118.59 billion in 2013 to $143.13 billion during 2016.
  • As a nation, China is very web-educated with 74% of citizens using Smartphone’s for product price comparisons and reviews, compared to the global average of 43%. They are also much more likely (37%) to purchase these goods through the mobile devices than the global average (26%).
  • In regards to industry specific goods, the top 3 most purchased products online globally include consumer electronics, books and clothing. Luxury goods are the least popular product category bought online.

Infographic on the Asian e-commerce industry

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E-commerce and supply chain management

Although China has a bigger population with more online users than Australia, it’s a good example to see how businesses are succeeding in using the e-commerce channel. So what can Australian businesses learn from China?

  • The importance of quick and responsive e-fulfilment is mandatory to create a competitive advantage that meets growing customer expectations and greater demand through online avenues. Just like in China, air freight will be one of the key mode of transport considering the far distances in Australia.
  • Furthermore Australian businesses need to start now with preparing and streamlining their supply chain strategy for the rapidly growing demand in order to not stay behind.
  • Every business is different – an in-house IT solution or a outsourced solution of an e-fulfilment company that meets the business’ requirements – if your considering to expanding your retail business online, make sure you have the right e-fulfilment strategy and technology in place. Please find more information in our article Can your current ERP (Enterprise Resource Planning) or WMS (Warehouse Management System) handle e-fulfillment?.

Want to speak to a comprehensive 3PL provider that can assist with your supply chain management? Contact BCR today.

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For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including BrisbaneSydneyMelbourne, Adelaide and Fremantle (Perth).

transport

Will Sea Freight Rates From China Increase by 50 percent?

In the past few weeks, we have received General Rate Increase (GRI) notices from most of the shipping lines bringing cargo from China to Australia. Shipping lines are attempting to increase sea freight rates by as much as 50%. Are shipping rates becoming too expensive for small-to-medium enterprises (SME) to handle?

Read on to learn why shipping consortium’s are increasing rates and what your freight forwarder can do about it.

Marooned: Oversupply in the container shipping industry

Too many ships in the sea are what analysts are forecasting for the ocean container industry in 2014 and beyond. A titanic increase in supply will continue to grow into the future after an over-estimation of demand by shipping lines on worldwide trading routes. Restorative rate measures such as GRIs were recently announced to go into effect on May 15, 2014 by international carrier conglomerates or consortia in order to accommodate sluggish global demand and restore rates to more sustainable levels.

Shipping industry under mounting pressure

The shipping industry is under serious pressure this year to cut already rising costs due to the over-supply currently plaguing trade lanes around the world. The misinterpreted trade peaks in the past caused container shipping companies to over-produce large mega ships, so much so that there has been a 40% increase of capacity in the past 5 years. The market only felt a 20% increase in capacity due to the utilisation of cost-saving strategies such as blank sailing and slow steaming. With this oversupply in capacity, the market has seen a fall in shipping rates to an unsustainable level and the shipping market as a whole has fallen deeper into distress.

Shipping lines working together to increase freight rates

To combat the over-supply and falling shipping rates, the shipping lines are working together, removing capacity and utilising spare slots on competitor ships in order to force the market to pay more. In addition to higher rates, customers are experiencing longer waiting times for their cargo. Consumer confidence in shipping lines has consequently diminished, with levels of reliability and brand trust decreasing every quarter last year and forecast to continue into the second half of 2014.

The next GRI is forecast to hit the market on May 15, 2014, and shipping lines are hoping for an increase in sea freight rates of up to 50%.

What can your freight forwarder do about it?

90% of the world’s trade is transported by sea freight, and the estimated annual turnover of the container shipping industry is at $150 billion. This tells us the shipping industry isn’t going anywhere but neither is the volatile trajectory of costs. Customers need to accommodate these trends by streamlining their sea freight supply chain and logistics management. A company needs to work with an experienced sea freight forwarder that has relationships with multiple carriers ensuring their customers are informed on the market and have options so their products arrive on schedule.

At BCR we proactively communicate with our customers so they are informed on the market and we work with them to develop a strategy that mitigates rate increases and matches their needs to ideal schedules. We send out a monthly market update to our customers with tailored information for their business notifying them on industry changes that will directly affect their freight transportation. If you have a question on the state of the oversupply in the sea freight market or would like to learn more, contact BCR today.

For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including BrisbaneSydneyMelbourne, Adelaide and Fremantle (Perth).

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