What an Investment Banker Thinks: The Market for Supply-Chain Tech and Logistics
The online retail giants are leading the charge, with Amazon investing heavily in its delivery network, while Alibaba has partnered with DHL to provide logistics services to Chinese businesses. For many years, banks have been focused on providing traditional banking products and services to their customers. Today, however, these companies need to pivot towards a new way of doing business. They need to become experts in all facets of finance.
The Growing Importance of Logistics and Supply-Chain Tech
With significant growth projected for e-commerce in China, India and Southeast Asia, the role of technology in supporting these markets is set to increase rapidly. In Asia, online sales are forecast to increase fivefold by 2020. By 2020, e-commerce sales in China alone are expected to reach $980bn, and in India online sales are forecast to grow to $600bn, according to Statista. With consumer buying habits becoming more demanding, retailers and e-tailers are introducing greater efficiency in order to support their omni-channel strategies. The next revolution in logistics technology could well be on the way, and while cloud computing and mobile tech are already pervasive, new applications are springing up all the time. Continue reading
The e-commerce sector
First and foremost, e-commerce comprises retail companies that serve customers online, and companies that supply them with products. Like any business, they look for ways to provide new services and improve efficiency while lowering costs. At the same time, they want to make sure that their operations aren’t negatively affected by new trends or competition. This requires sophisticated logistics software that can help with everything from forecasting demand to managing inventory. According to a Deloitte report, the e-commerce market is set to grow at 12.5 percent per year. Not only that, but almost one in four e-commerce transactions were made by consumers aged under 34.
The Challenges with Modern Logistics
Perhaps unsurprisingly, an estimated $2.2 trillion worth of goods travel across Europe, North America, and Asia for shipment every year. Depending on the size of the company, this number can be increased or decreased significantly. With the percentage of internet retail sales in the U.S. approaching 50%, and the global demand for shipping surging, logistics are key to companies’ ability to stay competitive and find success. The increased reliance on technology is bringing about a paradigm shift in the way supply-chain functions.