Wen Shu Dao always makes sense
The "rabbits" from Southeast Asia began to jump to the Middle East.
Since the acquisition of Best Express and the basic completion of the construction of the domestic express delivery network, Jitu once again officially announced a new layout some time ago, starting the operation of the express delivery network located in the United Arab Emirates and Saudi Arabia (referred to as "Saudi Arabia"). According to the news, in April last year, Jitu launched the Middle East expansion plan, and after 8 months of inspection, site selection and trial operation, it officially operated the express delivery service network in the United Arab Emirates and Saudi Arabia.
Before the official announcement, Jitu has established a nationwide self-delivery network and a localized warehousing system in the United Arab Emirates and Saudi Arabia, covering all local provinces and regions.
The Middle East occupies an important strategic position between Africa and Eurasia, and last year the Saudi crown prince launched the Transport and Logistics Strategy, positioning the Kingdom as a logistics hub connecting three continents and improving all transport services. At this time, the entry of the pole rabbit is ambitious.
Express delivery giants overseas "war", the Era of Online Shopping for Middle Easterners is coming
As a courier company that has grown up from overseas markets, Jitu's layout in the Middle East is natural, and today, its express delivery network has covered 10 countries in China, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Singapore, the United Arab Emirates and Saudi Arabia.
And domestic express delivery giants are also taking action. In September, SF's wholly-owned subsidiary completed the acquisition of 931 million shares of Kerry Logistics, an international logistics company with founder Guo Henian as the richest man in Malaysia. Zhongtong and Yuantong are also aiming at Southeast Asia, and have accelerated their own layout speed in cross-border routes.
In 2017, the policy encouraged key express delivery companies to build a cross-border delivery network based on the surrounding areas, covering the "Belt and Road" and facing the world, which stimulated domestic express delivery companies to set off a wave of going to sea. However, the current express delivery to the sea is very different from before. First, although the fierce price war in the domestic express delivery industry has gradually turned off under the intervention of supervision, this peace is not long-term, and no one can guarantee it. It is precisely this price war that has enhanced the willingness of express delivery companies to expand overseas markets.
Second, an obvious signal is that Ali has begun to move the overseas market. In the adjustment of Ali's organizational structure, Jiang Fan is in charge of Ali's two major overseas businesses, and Daniel Zhang has also raised overseas affairs to a very high position in the group, and specially emphasized that overseas business may become one of the main growth drivers of Ali in the next few years.
Ali's actions will directly drive the closely related Tongda system to accelerate the pace of overseas layout, and the changes in the Middle East market are also attracting the attention of e-commerce and express delivery companies.
For a long time, the e-commerce business in the Middle East has been growing slowly, with online retail sales accounting for only 2% of the total retail sales of the market, and even the members of the Cooperation Council of the Arab States of the Gulf account for only 3%. However, the outbreak of the epidemic is changing this situation.
RedSeer's data shows that in just one year, e-commerce in the MENA region grew by 52 percent to reach $22 billion in annual merchandise transactions (GMV) by 2020; by 2021, the industry is expected to grow by another 35 percent to reach $30 billion a year GMV. Among them, the Uae, Saudi Arabia and Egypt have the highest penetration of online shopping, and even directly save Fetchr, which is on the verge of closure in 2019.
The pandemic has indirectly fostered the habit of Middle Easterners to shop online, and their recognition of online shopping is growing. In a report released by Checkout, 47 percent of consumers in the Middle East said they expect to shop online more frequently in 2021, while only 15 percent expect their online shopping frequency to decline.
When the war situation of southeast Asian e-commerce is gradually white-hot, the Middle East may be the next "gold mine" to be developed.
Who will leverage the cash society in the Middle East?
From the perspective of the degree of mobility and the level of residents' consumption, the Middle East Gulf region is definitely one of the few places in the world that is suitable for the development and growth of e-commerce models. The region has a population of more than 54 million, a PER CAPITA GDP of more than $70,000, and a global leader in Internet penetration. Among them, the Internet penetration rate in the United Arab Emirates is as high as 99.2%, and in Saudi Arabia is 95.7%, not to mention that the young people in this place account for more than half of the country's population, and they are familiar with Internet social networking, e-commerce, games and so on.
E-commerce giants have long targeted this market, Amazon, Ali AliExpress and jollyChic, SHEIN and other cross-border e-commerce have entered the Middle East.
Taking SHEIN as an example, SHEIN topped the list of the top five middle eastern popular apps that Middle Eastern media Al Bawaba took stock. The data shows that SHEIN has more than double the number of downloads on the Apple App Store and Google Play for Android than Amazon, totaling 17.52 million. Amazon's popularity in the Middle East has also soared since it acquired Souq, while local e-commerce firm Noon has the highest penetration in the UAE and Saudi Arabia.
At present, in the Middle East's e-commerce market, an international giant, cross-border e-commerce and local e-commerce have gradually formed a situation of confrontation with each other.
However, the activity of e-commerce giants does not seem to have driven the growth rate of online retail in the Middle East market, and the construction of the supporting logistics system is even slower.
The reason may be traced back to a rather helpless reality, Middle Easterners love cash too much. Members of the royal family pull cash to buy luxury cars, local tycoons drive cars with cash to tip favorite anchors, middle-class people go out without carrying bank cards, and even ordinary people pay salaries with sacks to fill cash, these things have long been seen in the Middle East.
For e-commerce platforms, Middle Easterners' preference for cash transactions has led them to choose cash on delivery when shopping online, which has led to higher return rates, low delivery rates and ultra-long account periods, bringing huge operating capital pressure to merchants. According to Bain & Company, about 62% of online shoppers in the Middle East and North Africa prefer cash-on-delivery payments, up from 85% in Egypt.
PayPal survey data also shows that due to consumers' low trust in online shopping and online payment, about 60% of online shopping is in the Middle East with COD (cash on delivery) as a payment method.
The COD model not only reduces the convenience of online shopping, bringing loads to merchants, but also causes trouble to the realization of the "last mile" of logistics. Because most of them choose cash on delivery, the time for the delivery of a single courier piece increases, and disputes often occur with consumers because of the problem of returns. In addition, in the Middle East, where the security situation is general, the courier brother with cash on his body is also easy to provoke robbery.
In order to expand the e-commerce and logistics business in the Middle East market, foreign giants must change the long-term user habits of Middle Easterners who use cash, but so far there seems to be no progress. Even local fintech companies and emerging payment methods have a relatively low volume of electronic payment transactions in the overall market in the Middle East.
Achieving cashless payments in the Middle East clearly has a long way to go.
Middle East to send express, it is difficult as the blue sky
The layout of e-commerce giants in the Middle East has directly promoted the improvement of services in the logistics industry. For example, Noon has invested huge sums of money in localization logistics and warehousing, and his team can basically completely consume the orders of the platform; for example, Amazon has also increased investment in logistics and reached a cooperation with Emirates Post, delivering more than one million Amazon packages in one year.
Relying only on the self-built logistics of the e-commerce platform, it is difficult to meet the needs of the growth of e-commerce business, but it is difficult for the express delivery company currently landing in the Middle East to become a climate. Take Fetchr as an example, Founded in 2012, Fetchr was once one of the most eye-catching startups in the Middle East, and in 2018, founding executives left one after another, and a call center collapse occurred at the peak of e-commerce promotions, and successive crises once plunged Fetchr into bankruptcy.
Now the injection of new funds has solved Fetchr's urgent needs, but whether it can finally come back to life is still unknown.
Logistics infrastructure in the Middle East has not kept pace with the growth of e-commerce business, in large part because the last mile problem has been difficult to solve.
On the one hand, due to the imperfect infrastructure, the regional division of the Middle East is blurred, and the local house number and address situation are also very complicated, which leads to residents writing addresses, which will be unclear when writing addresses, especially foreign workers, and the addresses are even more ambiguous. A Middle East courier brother said that when he first started to deliver express delivery, the address on many express mails was not found at all, and he had to call the buyer over and over again to inquire and confirm, and another thing that must be confirmed was whether he could directly send the mail.
This is taking into account the special traditional customs of the Middle East. In many parts of the Middle East, the concept of "male outside, female inside" is deeply rooted, and local women are mostly housewives, and women are often restricted from contacting strange men, even if it is not possible to take express delivery.
Fetchr has used to hire women as couriers to solve this problem, but because many women must be accompanied by male relatives or in-laws in public, Fetchr has to hire family members to complete the delivery work together, which undoubtedly increases the cost of logistics companies.
On the other hand, because the Middle East has not yet established a logistics network similar to a rookie station, the efficiency of couriers is very low. Couriers in the Middle East often encounter various situations such as no phone calls, no one returns text messages, and no one signs for the appointment after a day, they have to put the courier on the car again, and when the buyer has a reply, it is far from the address at that time, and it takes more time to deliver.
The distribution of online shopping in the Middle East is uneven, coupled with the geographical environment, the distribution of orders is relatively sparse, which makes express delivery more time-consuming.
At present, logistics company FODEL intends to solve the last mile problem in the form of a rookie station, which has joined forces with DHL, and DHL customers can pick up packages through FODEL's network of station stations, such as in supermarkets, cafes, convenience stores and other locations. But what lies in front of this model is that consumers choose cash on delivery more, and there is no courier, how to deliver?
In the Middle East, the last mile will continue to plague the gold miners who enter this land, and there may be more innovations to solve this problem in the future. Dubai's crown princes, for example, are embarking on drone transport plans to build a delivery system and network that uses drones. If achieved, it would largely avoid obstacles from infrastructure, traditional cultures and user habits, thereby improving efficiency in warehousing, inventory and distribution.
Of course, drone delivery is still a beautiful dream.
[Titanium media author introduction: Tao is always reasonable, once used the name crooked Dao, the Internet and new media in the science and technology circle. The WeChat public account of the same name: Dao always has a reason (daotmt). This article is an original article, and any form of reproduction without retaining the author's relevant information is not retained. 】