OP-ED

WELCOME TO THE ECOMMERCE BOOM

Rita Huang, CEO of iMile writes how the rapid rise of eCommerce has been shaping transformations across the regional logistics industry

urrently, we are in the middle of

Can eCommerce boom. In recent years, the eCommerce market in the Middle East has grown rapidly, further amplified by the global pandemic. This in turn has caused the logistics landscape to experience a pivotal shift, which has transformed the way we shop and ship across the region.

A few key factors have provoked the rapid adoption of eCommerce. For starters, the Middle East has one of the youngest populations in the world, with more than 28% of people between the ages of 15-29. Given the population’s youth, rates of internet penetration are also some of the highest in the world.

As rapid digitalisation swept over the region in recent years, eCommerce became an imminent reality, redefining not only the consumer’s path to purchase, but the way our business models operate. For the logistics industry, readiness has been critical for success.

A RIPPLE EFFECT

And let’s not forget about the impact of COVID-19. The pandemic has played a key role in unlocking the potential of eCommerce by pushing people further online, creating a ripple effect across the retail, logistics and fintech industries.

Prior to COVID-19, the region’s eCommerce sector was already one of the fastest growing in the world, however it still accounted for just 2% of the retail market in the region. Today, 80% of young people in the Middle East shop online frequently and 50% are shopping more online now

than before the pandemic. As a result, the size of the Middle East eCommerce market has quadrupled since 2015.

In key markets such as the UAE and Saudi Arabia, an average of 58% of consumers stated they would maintain their current shopping behaviours post pandemic. In these countries, where the growth of ecommerce has been particularly prominent, strong trends of technological uplift have emerged.

Our shift online initially placed pressure on entire supply chains to adapt to meet growing customer demands, pushing the logistics industry to deliver even better service, and at a lower cost.

RISE IN ECOMMERCE

In my experience with iMile, the rise of eCommerce has been a driving factor for the evolution of the logistics industry. When the pandemic first hit, flights were disconnected, and supply chains were disrupted. Since more than 50% of our business comes from China, this presented unforeseen challenges. At the same time, consumers were stuck in lockdown, shopping online more than ever before. However, once border restrictions eased, the penetration of eCommerce accelerated, causing iMile to grow 100% since last year.

Evidently, supply chain visibility is essential for any logistics business operating today. The rise of eCommerce made this more apparent than ever before. And we can’t talk about supply chain visibility without mentioning IoT sensor technology – vital for the efficient tracking of inventory, vehicles, and equipment through cloud-based technology.

IMPROVED OPERATIONAL EFFICIENCY

IoT sensors can collect real-time data to improve operational efficiency. For example, data on traffic patterns, weather or road conditions can be used to reshape demand or redirect supply to optimise route planning. Logistics companies that have integrated real-time technology into their supply chain have reported 20% more efficiency than those without.

When it comes to the consumer experience, customer service is also a key touchpoint for the logistics industry. Customer expectations have increased significantly, for both individuals and businesses. Consumers want goods faster, with more flexibility, and at lower costs. With a surge in online purchases, web

Rita Huang, CEO of iMile

to mobile technology is being increasingly incorporated to track customer interactions for a more agile communication model.

Another trend driving transformation in the logistics industry is sustainability. Last-mile delivery tends to be viewed as an energy-consuming function. However, this has created opportunities for greener approaches to lessen environmental impact. For example, logistics companies are switching to electric vehicles and using AI-based software to calculate the transport route with the lowest emissions.

POWER OF TECHNOLOGY

Essentially, to thrive in the logistics industry, we must continuously adapt to changes in the world around us. I believe it is vital to harness the power of technology to constantly improve speed and efficiency.

Furthermore, developing more streamlined consumer touchpoints and simplified user interfaces also helps to keep customers satisfied within the ever-growing demands of the logistics industry.

Amongst all the technological trends that emerge, collaboration and adaptability are the main ingredients in the recipe for success within the ever-changing logistics landscape. Only by facing challenges head-on, and turning them into opportunities, can we truly test our resilience and continue to provide innovative solutions that drive the future of the logistics industry forward.