We’ve seen all the statistics and all the articles: e-commerce is a booming industry in Southeast Asia.
We’re looking at gross merchandise value of over $10b, up from 2015’s $5.5b, and double-digit growth rates of the e-commerce market over the region, notably in Vietnam. That’s pretty amazing. After all, that means that a large proportion of buying power is now being shifted towards customers that were traditionally seen as “poorer”. E-commerce has opened up huge opportunities for buyers and sellers, both on a large and small scale. From gaining access to brands once thought only to be accessible to those who could travel (like region-specific cosmetic brands), to the ability to sell their own wares and/or produce (check out Etsy!), a greater slice of the conspicuous consumption pie has opened up across different income levels across the world. And that’s a great thing.
But here’s the thing: as much as we’ve seen the rise of the e-commerce industry, last-mile delivery, especially in Singapore, doesn’t seem to have the same kind of growth, or quality thereof. Don’t get me wrong; we definitely know the big-name startups like Lalamove, or Ninjavan, but when you look at other post and courier services, especially the smaller, or older ones, you’ll notice a few things.
1) Customers tend to assume that they can get by with the lowest prices possible
Which makes sense. Supply and demand, all that. The more courier services you have in a country (and Singapore had almost 500 post and courier services alone as of 2017), the more prices have to go down in order for you to be competitive. Great for the customer, not so great for service providers, because that means tons of smaller firms are now operating on a razor-thin margin, or eating into their own profit. But there’s nothing wrong with that is there? Free market and all, the less efficient firms get kicked out, etc.
Except that pushing prices down hurts everybody in the long run, because even for your investor-backed firms, someone has to bear the cost of your low prices, and very often it means the first people to get cut are the drivers and other manpower on the ground. That’s because fixed costs, like your vehicle insurance and office rental, can’t be changed. Variables like salary, however, can. So when people take lower salaries, you can expect poorer service. In addition, here’s one thing many customers don’t know: logistics companies tend to use 3PL and 4PL outsourcing services. These 3rd and 4th party service providers essentially bite into margins even more, and make centralized quality control even harder for the company in the front end who took your order.
If you’re sick of seeing blue “Sorry, we weren’t able to deliver your parcel” slips at your door even though you KNOW you’ve been at home the whole day and haven’t heard the doorbell ring, then you can imagine how much worse it’s going to get.
Unfortunately, most people think that “price” and “value” are equal to the same thing. However, sometimes smaller companies also give greater value even if they’re charging higher. If you’ve been with them for a while, many of them are happy to even deliver parcels to your hand, for example.
So in all honesty, given the volume cannibalization across all the courier services and the decreasing prices, you’re not as important as you think you are.
2) “it’s just a delivery how hard can it be?”
No, customers don’t need to care that it’s the company’s job to make sure everything is sorted out. They don’t need to know that there’s liabilities for goods damaged or lost, or that emergency routing and re-routing can take a while if there isn’t an optimization system in place. Very often, it’s just “give me my package”. And yell at whoever is at the other end of the line when it’s not delivered.
In case you couldn’t tell, quite a large portion of that was sarcastic in nature. A customer may not need to know the intricacies of optimizing a route or emergency re-routing, especially in situations like the Trump-Kim summit, but they really should know that there’s a person on the other end that doesn’t deserve a shelling. Mistakes happen. If the same mistake constantly happens, then go to a different company and talk with your wallet.
It is hard, sometimes: delivery drivers are some of the most at-risk individuals for accidents on the road, especially during peak seasons or holidays. When an employee gets into an accident, that’s horrific. It’s even more horrific when death is a real probability game, not possibility. Our priority is to make sure the individuals involved are safe; not your package. At least, not immediately.
If you can use awful weather as an excuse for being late, then you too can understand how sudden showers or storms may delay your package.
Trust me; everyone in the industry knows you can easily go to another competitor. Given how the industry partners with each other for 3PL and 4PL services anyway, your money will likely come back in one way or another.
So there you have it. Sure, it sounds like the issues that most customers have with service providers as a whole, but that, I think, is therefore indicative of a bigger problem at hand. No one is saying you have to tolerate horrible service, but having a little kindness really goes a long way. Have you been on the receiving end? Let us know in the comments.