Business

An ‘Uber’ for Chinese e-commerce

Logistics companies are struggling to match delivery capacity to fluctuating demand. A new social-media platform could help.

In Europe and the United States, major online retail players, such as Germany’s Otto Group and Amazon, dominate the e-commerce market and oversee highly efficient distribution chains. In China, by contrast, the e-commerce sector is fragmented, and as a result the country’s logistics players struggle to keep up not only with the dizzying rates of e-shopping growth (50 percent and more) but also with the wide variability in demand.

During slack periods, trucks are often loaded to only 30 to 40 percent of their capacity, raising costs.

At peak times, such as the buildup to China’s Singles’ Day (when shipments run five to ten times higher than usual), merchants complain that orders are lost because of delivery delays.About 50 companies have been testing a new app-based approach to managing demand swings that uses digital and social technologies. An Uber-like shipping platform links merchants with multiple logistics companies’ trucking fleets and drivers, enabling the companies to share capacity when they have room to do so.

The app, furthermore, serves to mobilize an on-demand pool of thousands of independent urban Chinese delivery drivers. The service provides dynamic profiles of drivers, their delivery records, and their capabilities—such as whether they do unpacking or installation work.Read the complete story Here