Economic Times (ET): What are the main factors or trends shaping supply chains across the world?
Kami Viswanathan (KV): During the pandemic, the logistic sector was a lifeline for communities, delivering critical medical supplies and vaccines around the globe and keeping international supply chains open for essential and every-day items. Covid-19 moved the world from a just-in-time supply chain model to just-in-case supply chain — one that builds in contingencies, and values agility and resilience.
Today, companies are facing unprecedented changes due to innovation, technology disruptions, and evolving customer expectations. Technology and sustainability will have a substantial impact on how we work in logistics.
The first trend we are seeing is that consumers today want to know if a brand’s supply chain is environmentally sustainable, including whether it purchases sustainably sourced products. In India, eight out of 10 customers prefer to buy from companies with an effective environmental, social and governance (ESG) strategy in place. According to Deloitte, traceability and insight, operational excellence and industry collaboration are three key enablers for a sustainable supply chain. Technology will play a pivotal role in improving traceability and give insights to assist with emissions management and overall environmental footprint.
The second trend is how innovation that inspired the start of FedEx nearly 50 years ago, is now fuelling our future, as we combine logistics with digital intelligence. The size and scale of our network gives us key insights into global supply chains and trends. We are also leveraging the power of technology to make supply chains smarter for everyone through sensor-based technologies, providing enhanced visibility and predictive capabilities, and enhancing sortation technology.
ET: E-commerce has been a bright spot, especially after the pandemic. How do you see e-commerce sales playing out in India and across the globe?
KV: The e-commerce industry is growing at an exponential rate, with cross-border sales being a key contributor to this increase. The Indian e-commerce sector is ranked 9th in cross-border growth in the world, according to a Payoneer report. The Asia-Pacific, which includes the world’s biggest e-commerce markets like India, mainland China, Japan and South Korea, will see revenue from e-commerce sales reach $2.09 trillion this year as 57% of the region’s population shops online.Changing consumer behaviour due to the pandemic is leading to a higher uptake in e-commerce growth like never before. SMEs believe they are well positioned to capitalise on this opportunity, with 98% agreeing e-commerce will become increasingly significant during the next three years. In the face of significant shifts in consumer behaviour, the role of logistics has been elevated to a critical enabler of a company’s customer responsiveness. When e-tailers ramp up their digital offerings, one commonly overlooked area is supply chains. An agile, resilient, and efficient supply chain is critical to delivering seamless online experiences to consumers.
E-tailers are adapting to meet consumer expectations in this post-pandemic, digital-first era and logistics providers like FedEx are helping them re-imagine their business model and how they can make greater strides in accessing cross-border opportunities and make it more convenient for their customers.
ET: What is the role of the logistics sector in the e-commerce industry and how is the sector responding to the demand?
KV: Logistics players are the backbone of the global e-commerce ecosystem and can play a vital role in transforming the e-commerce supply chain for what’s next.
The Indian e-retail market is primed to reach nearly 300 million to 350 million shoppers by 2025. Eight out of every 10 consumer purchases have increased in the last three years due to e-commerce, and 83% of consumers anticipate that this trend will continue in the next three years.
Companies, including small and medium enterprises (SMEs), are embracing e-commerce platforms to stay competitive. For consumers, the brand experience has now extended into backend operations of transportation and logistics. This wasn’t thought about before. As companies shift from focusing only on selling products, to offering a comprehensive customer experience and engagement across the purchase journey, the supply chain is adapting accordingly. Now, more than ever, finding the right logistics partner is critical. A well-managed supply chain leads to orders being filled precisely and on schedule, which results in the enhancement of customer experience and trust.
Businesses and consumers are demanding greater control, flexibility, and visibility for their shipments. In keeping with this evolved expectation, logistics companies are offering time and day-definite shipping solutions for both domestic and international deliveries, increased visibility and easy returns.
In today’s world of just-in-time supply chains, global trade, and accelerated e-commerce growth, understanding customers and anticipating a shift in their expectations is a great way to build an agile and responsive supply chain in e-commerce.
ET: How can technology play a pivotal role in catering to the changing supply chain requirements for e-commerce?
KV: We have seen how the Covid-19 pandemic has accelerated digital adoption for consumers and businesses alike. As a result, there is an exponential increase in e-commerce activity; customers demand faster delivery, easy returns, and increased visibility on their shipments. According to research commissioned by FedEx Express, 60% of businesses in the Asia-Pacific expect to accelerate investment in customer data technology in 2022 and beyond.
Technology plays a crucial role to deliver a seamless customer experience. In logistics, artificial intelligence (AI) can help save time, reduce costs, increase productivity and accuracy with cognitive automation. Furthermore, the digitisation of logistics planning through machine learning can help predict unforeseen circumstances, which can further reduce the chances of any issues during the delivery of goods.
ET: What role does FedEx Express play in India to empower SMEs to expand to new markets worldwide?
KV: SMEs are the growth engines of the Indian economy. Indian small and medium sized businesses are prioritising cross-border trade to thrive in the post-pandemic world. According to a recent survey by PayPal India, 94% medium small and micro enterprises (MSMEs) recognised that transcending borders results in growth; and they are making cross-border trade a business priority.
A customer’s journey doesn’t stop at a purchase confirmation. Small businesses looking to tap into the global e-commerce market must be able to offer fast and reliable delivery options. Logistics — the gateway between the online and the physical experience — plays a crucial role in ensuring customers are satisfied.
FedEx enables SMEs with a world of opportunities through the strength of our global network, tailored solutions and value-added services. Our interactive e-commerce solutions like FedEx Delivery Manager International allows SMEs to offer their customers the freedom to manage delivery preferences. We also offer customers enhanced convenience and flexibility with FedEx International Connect Plus (FICP), a day-definite, e-commerce shipping service that combines competitive speed with attractive pricing.
FedEx has a long history of supporting, enabling and empowering entrepreneurs and small businesses. Right from enabling them through various platforms such as SME Connect, a knowledge-sharing platform for SMEs to interact with industry and subject matter experts for solution-oriented discussions that benefit their business to the Small Business Grant Contest (SBGC). Since 2012, FedEx has been hosting the Small Business Grant Contest, which has awarded more than $1.5 million in cash and prizes to over 100 small businesses globally. This year, at the AMEA Small Business Grant Contest, an Indian e-commerce startup, GoKwik, was crowned the winner among 100 participants across 14 markets. It received a FedEx grant. The SBGC platform provides small businesses with the inspiration and financial resources to take their business global.
