Logistics and warehouse capacity would be the keys to determining the success of e-commerce retailers, the Market Intelligence & Consulting Institute (MIC, 產業情報研究所) said yesterday.
Although the COVID-19 pandemic has cast a shadow over the retail sector, it has allowed the e-commerce industry to shine.
E-commerce sales in Taiwan surged 16.5 percent year-on-year in the first quarter, while sales across the wider retail sector contracted by 0.6 percent.
Photo courtesy of PChome Online Inc
Pointing to the nation’s two largest e-retailers — PChome Online Inc (網路家庭) and Momo.com Inc (富邦媒體) — the institute said that the race to build bigger warehouses and to improve logistics management is on.
“Taking a look at their [PChome and Momo] performances last quarter, we can clearly see that the nature of the competition has changed from a focus on boosting merchandise quantity to lowering logistics costs and expanding warehouse capacity,” MIC e-commerce industry consultant and director Wang Yi-chih (王義智) told an online forum.
The company that “has a strong logistics and warehouse system will have the highest chance of winning,” Wang said.
PChome reported that sales grew 16.05 percent year-on-year to NT$10.68 billion (US$357.13 million) in the first quarter, while Momo posted a 28.72 percent growth in sales to NT$15.11 billion.
“Logistics is one of the most important pillars supporting the e-commerce industry,” and major players have been setting up their own fleets, Wang said.
Seeking to ensure fast deliveries, Momo last month set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), which has a fleet of 200 couriers and more than 100 vehicles.
PChome is one step ahead, having established PChome Express Co (網家速配) in 2018, which has 250 couriers and 200 vehicles.
The importance of logistics in the development of e-commerce has been further highlighted by the recent surge in demand for food deliveries, Wang said.
As an increasing number of customers choose to eat at home, more e-commerce operators are offering fresh produce and frozen food on their platforms, which require fast delivery, he said.
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