5 Challenges and Opportunities Facing Retailers Establishing a Global E-Commerce Supply Chain
The road to global e-commerce success can be an uphill climb for retailers entering an international market for the first time. As a retailer seeks to establish an omnichannel supply chain and distribution network in new regions, there are compelling opportunities — and also challenges. One thing the industry agrees on: it's worth it.
Consider the lightning-fast speeds at which global online sales are growing (14.8 percent annually) when compared with total retail sales (0.9 percent each year), according to a Jones Lang LaSalle report. With global online retail sales expected to have topped $1.2 trillion in 2013, and 39 percent of the world's population already online, embracing e-commerce has become mission-critical for most retailers.
Seizing Opportunity, Overcoming the Challenges of International E-Fulfillment
Prioritizing retail logistics strategy will be key to unlocking opportunity in global e-commerce fulfillment. Here are five core issues retailers will face in international retail expansion, each posing its own unique challenges and opportunities.
1. Updating supply chain facility strategy
Challenge: Building new facilities isn't cheap, but relying on outdated, cookie-cutter facilities is likely to weaken market agility.
Opportunity: Incorporating specialized facilities such as mega e-fulfillment centers, presortation facilities, local delivery centers and returns processing centers can drive the logistical imperative to fulfill online orders efficiently and conveniently.
2. Investigating developing markets
Challenge: Developing countries may have inadequate transportation infrastructure outside their major cities.
Opportunity: Although infrastructure may currently be lacking, analysis shows that online sales in developing countries will increase over the next five years, and that by 2017, nations like Indonesia, India and Mexico are expected to experience the highest growth rates in B-to-C e-commerce sales. Meanwhile, in countries like Russia, where brick-and-mortar retail stores are also undeveloped in outlying areas, internet sales may well leapfrog physical retail growth.