What can we learn from Chinese e-commerce giants in their B2C logistics network

It’s that time of the year again. China’s – and the world’s – biggest online shopping event just took place on 11 November. known as Singles' Day, made incredible sales volume!

The annual event kicks off on the midnight of 11 November and runs for 24 hours on Alibaba, Tmall and Pinduoduo e-commerce giant platform. This is the Asian version of America’s Black Friday and Cyber Monday shopping events – but bigger than the two combined.

In 2019 Nov 11th, JD.com made 4,728,000,000,000 RMB and Tmall made 2,684,000,000,000 RMB revenue in one day

How is the high demand being met in the B2C logistics network side to make sure so many packages delivered as promised to the customer? I really love to share something I know with you all.

Smart Automated Warehouse

Inside Alibaba's smart warehouse where robots do 70% of the work. they can carry up to 500 kilograms above them around the warehouse floor. They have special sensors to avoid colliding into each other and they can be summoned using WiFi. When they run out of battery, they can take themselves to a charging station. A five-minute charge can power them for 4/5 hours just like a robotic vacuum.

Use Parcel Locker

Chinese urban culture is busy. So everyone is out working. Parcel lockers are ubiquitous in China, even in some rural areas. I know Amazon also has Amazon lockers in New York but not a lot. In China, apartment building or office building will have parcel lockers within no more than 5 minutes' walk. So if you are not at home, the delivery person will put the parcel into any parcel locker that is a good fit for your parcel size. Then, your phone will receive an automated message alerting your goods shipped along with a one-time passcode. Then you would use this code to open the parcel box. And the parcel lockers are accessible 24 hours 7 days.

Last-mile Communication

Drivers know their patches, so when they get to an office building or residential building, they will call the customers. Phone calls are crucial to the last mile – forget about apps and customers' app push notifications. If the parcel is for me, the courier driver always calls me to say, “XXX, I’m here, come and collect your parcel.” Then I either meet the courier to collect the parcel or asks the courier to put the parcel in a nearby parcel locker. Alternatively, if I am not at home/ office but nearby, I might tell the driver, “Bring it to me where I am.” And the driver will come to where I am but, of course, there will be additional fees directly to the driver. Without speaking to the customer, the driver will never just throw your package in front of your door or simply take it back to the sender. If I have questions after I receive goods, I can always find the driver's name and phone number in my order tracking info and call the driver. The last mile phone call is so important communication to the customer. It prevents a lot of delivery mistakes happen: deliver to the wrong place, give parcels to wrong receipts, bring back to the USPS office for customer to make another trip to claim the parcel or send back the parcel to the sender which may be time-sensitive goods to the customer, etc.

Flexible Delivery Hours

Chinese delivery company usually offers regular day time delivery and night-time delivery, weekday delivery and weekend delivery which maximize flexibility and efficiency.

Taking JD.com as an example,

1. if you submitted the order before 11 am ( some cities before 10 am) , delivery will be made the same day. If you submit the order before 11 pm ( some cities require 18:00 pm) delivery will be made next day before 15:00

2. You can choose night time delivery ( 19:00 - 22:00 ) in tier 1 cities

3. You can choose Sat & Sun delivery.

4. You can always set appointment time slot to deliver, for example, if you know you will be at home on Saturday, you can set up " delivery on Saturday 11 AM)

I think B2C delivery competition is more and more fierce than before. Amazon pioneered the same day and the next day delivery model in the US and now a lot of retailers try to keep it up. Target offers same-day grocery delivery. Costco also offers same-day grocery delivery partnering with Instacart. Macy's adopted an omnichannel strategy to allow customers to order online and pick up in the store. Those strategy works but has not achieved the best results as the Chinese B2C logistic network do. Hopefully, US companies can do better :)

Have comments, let us chat!