While companies like Amazon seem to have their logistics models down, what about the logistics of smaller companies in developing nations?
In North America and much of Europe, goods are delivered by parcel, with an ever-increasing number of couriers to support e-fulfillment. Since more consumers are making their purchases online than ever before, one company may use three different courier services in order to ensure packages are delivered as quickly as possible.
In countries like Nigeria, poor road infrastructure is a huge problem, but also a huge driver for e-commerce. Physically shopping in Lagos will often involve waiting in hours of traffic and then having to find vendors amidst the crowds of outdoor markets.
Although the demand for e-commerce is there, challenges also present themselves. Because of the poor road infrastructure and traffic, most of the couriers travel by motorcycle, which limits the amounts and sizes of products they can take. It’s hard to imagine e-commerce coming into more rural areas of the country—package tracking would definitely be a must. In addition, theft prevention is huge—each driver must be vetted—even spouses and other relatives are met to ensure good character. Security at the warehouse is also very important.
These logistical challenges are far greater than those of the US, but the reward could also be much greater, with online retail growing at a 17 percent CAGR. However, retailers in developing markets are still worried about financial and logistical infrastructure.