HOW TO USE TECHNOLOGY TO INCREASE THE EFFECTIVENESS OF YOUR FULFILLMENT MODEL

23rd September 2016

PUBLIC CONFERENCE

Thailand E-Commerce Logistics Forum

Kavin Sopitpongstorn

Head of Sales and Commercial

DHL eCommerce Thailand

2

Welcome to the fastest growing industry..

E-Commerce Market Size2) 2014 (in EUR) e-commerce CAGR 2014-2020

Thailand’s Character

29%

1,113mn

Indonesia

7%

315mn

Philippines

27%

502mn

Vietnam

22%

1,105mn

Thailand

19%

495mn

Malaysia

11%

860mn

Singapore

E-Commerce market in South East Asia

• Volume and trend are

nominated by few large

eCommerce platforms

• Long-tail with large portion

of the market are C2C’s

• Infancy stage of Financial

infrastructure, lesser

numbers of Fin Tech

• Early adoption of

eFulfillment service, still

less population of

enablers in eco system

• Unclear Customs

regulations limit inbound

business opportunity

Bangkok | 28 January 2016

3

E-Commerce has high growth potential

Compared to other markets the share

of internet in retail for Thailand is

still at a very nascent stage

US

11,9%

CN

10,5%

DE

9,9%

TH

1,7%

Share of e-commerce GMV on total

retails sales of 2015 (est.)

By 2020, it will more than triple

1.6

2.5

3.6

1.1

1.7%

3.5%

2014 2018

2.8%

1.9%

2016 2020

Size (bn EUR)

Internet share in retail

Growth at a CAGR of >22% p.a

between today and 2020 with

even higher potential for growth

e-commerce market size in bn EUR and share of

e-commerce GMV on total retails sales

Bangkok | 28 January 2016

… and this growth is expected to continue unabated

4

These might be your challenges….

Unreliable and

lengthy transit

time

Difficult label

generation

processes

Delays and

damages to

en-route

products

Limited access

to features like

Cash on

Delivery

Limited data

integration

options

Complex and

tedious

administrative

processes

Limited

notifications

resulting in

undeliverable

Poor

experience at

doorstep/ other

touch points

Lack of trust in

merchants and

service

providers

5

Why is it so challenging with eCommerce?

Conventional / Off-line

Demand / Supply Forecast

Business to Business

All about inventory

Economy of Scale

eCommerce / On-line

Predictive / Demand

Generation

Direct to Consumers

All about information

Size doesn’t matter

6

Do you still remember Beer Game?

Traditional Supply Chain Concepts;

• Demand Forecast

• Supply Planning

• VMI

• JIT

• Trade-off

Doesn’t really

exist for

eCommerce

7

B2C Fulfillment Framework

Orders

Warehouse

Last-miles

Household

8

Enhanced e-Fulfillment Framework

Order Management

System

Warehouse Management System

Transport Management System

Household

cloud

Orders integration

via API

Also Integration

with shipper’s

legacy system

9

Technology Platforms for eFulfillment

OM

S

WMOS

ERP

Legacy

CRM Data WH

Front-end

Systems

PO

SOff-line Sale

Channels

TM

S

COD

Payment

Gateway

ePOD

This area is able to provide by 3PL’s

10

Speaking about Technology

Open-sourced eCommerce

Application

Order Management Solution

eFulfillment Provider

Startup Alternative Platform

(3PV’S)

11

One Size may not fit all…

LEAN Always start lean and stay lean

Define your business requirements

Prioritizing those requirements

Choose between build or buyIt is all about

‘connectivity’

12

Case Study : How technology improve your fulfillment

DC

• Company D is a leading home shopping provider

• Company D received and shipped out thousands of

orders on daily basis

• Company D offered cash collection service In

order to provide better shopping experience

• Cash collected from customers required a certain

process to ensure financial compliance is met;

• Proof of delivery to return to Accounting

• Physical cash to be tallied

• Deposit records from banks

• Total transit time for goods to arrive customers was

3-7 days nationwide and cash reconciliation

process took up to 15 working days

• Company D was looking for improving its

performance and staying at the top among an

increasing competitors in the market

Day 0

Day+1

Day+3

Day+4

Day+5

Payment Clearing T+15

Service

Centers

Delivery

Customer

Service

13

Case Study: Where are Pain-points?

• It is all started with selling more

– Improving lead-time

– Improving fulfillment rates

• Consumer behavior has changed

– More things to do in one day

– More options available

• PUSH them out to the market

– Inventory issue

– Returned goods

14

Case Study: How Technology help Company D?

cloud

On-line shipment

management

through web-service

Push notification to

customer’s smart

phone

Integrated track events

on web-service and API

Shipment and

payment

reconciliation via XML

TMS and Route

optimization

Customer can choose

where and when they want

to receive shipments

ePOD application

15

Case Study: Results

Total fulfillment cycle time

%Cancellation

Cash cycle time

5-7 days

15%

T+7 to 15

1-3* days

7%

T+3

BEFORE AFTER

16

• More than 480,000 employees in more than 220

countries/territories (including nearly 60%

outside Germany)

• 64m letters/3.4m parcels each workday in

Germany/more than 29,000 sales outlets in

Germany

• Group revenues1): EUR 56.6bn/Group EBIT1):

EUR 2.97bn/Market capitalization2):

EUR 32.758bn

• ~ 692 500 international express shipments per

day (2014) (Time Definite International) (+7.7%

vs. previous year)

• 4.0m tons of air freight/2.9m TEU3) of ocean

freight in 2014

• 13.7m square meters of warehouse space in

contract logistics (Supply Chain)

About Deutsche Post DHL Group

1) Financial year 2014; 2) As of 12/31/2014; 3) TEU = Twenty-foot equivalent unit

Getting to Know the Business

17

DHL eCommerce Product Portfolio

Full scope of e-commerce products and services

Existing improved

service template

1

Cross border

Delivery

Key enabling services

Core product offerings are cross-border and domestic delivery,

Fulfillment and eCommerce Solutions are key enablers to support growth

Product

Portfolio

Domestic delivery is a key pillar of our DHL

eCommerce service offering

Core Logistics Capability

To be piloted

in Thailand

(leveraging Blue Dart

and DPDHL capabilities)

Domestic

Delivery

2

Service template

developed in India

and Hong Kong

eCommerce

Solutions(e-Facilitation)

eCommerce

Fulfillment

34

Under development

(FCB pilot in HK/ CN)

Getting to Know the Business

QUESTIONS?

19

ขอบคุณ

20

BACKUP

21

3 2

1

• DHL SHIPPING SERVICES that brings your

shipments all over the world with trust and

confidence.

• PUBLIC APIs available for

eCommerce merchants to integrate

DHL shipping services seamlessly

into their internal ERP systems.

• DHL eCommerce PORTAL that

enables eCommerce merchants to

ship, track and report 24/7

effortlessly.

• Shipping APIs

• Tracking API

DHL API Offering