The downside of Covid-19's ecommerce boom: longer delivery times

Ecommerce delivery times jumped by nearly 120% in some Southeast Asian markets this year, as a direct result of the boom in volumes since the start of the Covid-19 crisis.

Together with ecommerce logistics community Parcel Monitor, ecommerce aggregator iPrice Group analysed a staggering 1.4 million parcel shipments across Singapore, Malaysia, Thailand and Indonesia between January and June this year. The pair were seeking clarity on how the ecommerce landscape has coped with shifting consumer trends under Covid-19.

Reports abound of how lockdown and fear of infection in public places has prompted people across the world to shop digitally – be it for groceries, essentials or consumer products. Southeast Asia has been no different, with Bain & Company and Facebook reporting in August that the region’s online shopping volumes will probably leapfrog half a decade of growth in this year alone.

Crunching the numbers, iPrice Group and Parcel Monitor revealed that parcel volumes across the four Southeast Asian markets in focus has jumped by 34% under the social distancing paradigm. Not surprisingly, parcels containing essentials have seen the largest increase – with pandemic essentials such as vitamins, sanitizers, facemasks, thermometers and soap taking centre stage.

At a time when the global economy is at its shakiest point in decades, the tendency to save is rife among global consumers. Turning to online shopping out of necessity, few have the confidence to shop for more than essentials – evidenced by the overall performance of the discretionary goods market. Even with such lopsided distribution, ecommerce has undergone an unprecedented boom, which in turn has thrown up key issues.

A logistical bottleneck

Few were prepared for the volumes that have emerged under the pandemic, and the strain on infrastructure is apparent. In addition, flights and shipping have all been facing delays during the pandemic, as they operate at limited times and look to navigate the varying travel restrictions across markets. The result is a logistical nightmare, and the researchers reveal that delivery times saw a jump across Southeast Asia during the thick of the crisis.

This trend varied to a remarkable degree from one market to another. In Singapore and Thailand, average delivery times increased between 10% and 15%, whereas Indonesia saw delivery times jump by 30%. In Malaysia, delivery times more than doubled – marking a staggering 119% increase.

Given that people were relying on parcel deliveries for essentials such as medicine or food, this situation was more urgent than ever. According to the study, the ecommerce sector has responded positively to the situation, devising new innovative delivery solutions to ensure that parcels reached on time.

One example is the concept of parcel locker networks – thousands of lockers distributed across markets that enables step-by-step delivery with accurate tracking and minimal human contact. The researchers report that this has been a popular solution across Singapore, Malaysia, Thailand and Indonesia.

Additionally, delivery companies have been experimenting with a range of technologies to help with logistics planning and cutting delivery times. The comprehensive efforts have produced stellar results. iPrice Group and Parcel Monitor report that delivery times are almost back to normal in Singapore and almost so in Indonesia, while Malaysia has already cut its average by a day as of June. These represent promising signs, as ecommerce continues to tackle the strain of the boom in volumes.