Highly seasonal demand across its network of warehouses left this large e-commerce provider
with a choice: Invest in a system that operates under capacity for most of the year, or one that can’t meet the peak volume.
"It's dying," says an electronics-store retailer, shaking his head as he looks out at abandoned stores and torn promotional posters in what was once the busiest market in the Zhongguancun district, known as China's silicon valley. "There are more sales staff than customers around here. Everyone buys online now."
The present business models being employed by e-retailers and their shipping partners are becoming increasingly unsustainable, according to a report from Transport Intelligence, a research and analysis firm focusing on the global logistics industry.
There's a wake-up call for American digital marketers who aren't actively developing their international online markets. While there are many risks to taking your business online to other nations, the risk of not going global, or of waiting too long to make the move, almost certainly will be greater.
In less than a decade, the mobile internet revolution has overtaken the digital revolution and is still accelerating. Mobile penetration is increasing, the costs of access and devices are coming down, and more and more people in both developed and developing economies are using the mobile internet as their first - and often their only - means of going online. Let's look at the phenomenon in Europe.
You think you've had bad customer service buying products online - how about the guy in India who ordered his wife a Samsung smartphone, and the package arrived with only a brick and a bar of soap in it!
Right now, many merchants who sell their products online and do not have a distribution center, warehouse or retail store in the state into which their product is sold aren't charging sales taxes, and cannot be required to collect them at the point of purchase. This stands in stark contrast to local wholesaler -distributors and retailers - businesses that have a brick-and-mortar presence on the Main Streets and in the commercial and industrial parks of our cities and towns and who provide jobs to our family members, friends and neighbors - who are required by law to do so.
With the meteoric rise of both e-commerce and express shipping across China, a distribution relationship between Alibaba and SF Express seems to be a natural fit. However, with SF Express recently showing interest in developing its own e-commerce businesses, Alibaba may consider SF Express as more of a competitor, making China Postal Airlines a more comfortable distribution option.
Online sales are predicted to be about $300bn this year, rise to $335bn next year and be worth $512bn by 2020, according to research from FTI Consulting Inc.
