The pandemic has stalled a number of industries around the world, upended the supply-demand balance, and prompted numerous businesses to reconsider their strategies for survival and remission.
Yet, this very pandemic also acted as a steroid shot for the eCommerce industry. It piloted innovation, reinvigorated diverse sectors, and led the growth and adoption of digital solutions and channels to empower eCommerce businesses.
The Middle East is a great example that showcases this innovative approach to deal with disruptions caused by the covid19.
Let’s have a look at what’s happening in the eCommerce supply chain in this region.
Embracing an innovative approach to technology has helped establish the Middle East as a “supply chain pioneer.”
The DP World, a leading enabler of global trade, had achieved successful integration with TradeLens. This blockchain-based digital container logistics platform modernizes and replaces tedious, time-consuming paper-based documents with blockchain-enabled digital solutions. Blockchain technology provides a more smooth and stable way to secure data sharing between different entities.
Moreover, by further developing location tracking and other technologies, businesses are more capable of operating their supply chains better, increasing their efficiency when it comes to problem-solving and sustaining the integrity of their products.
Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Office of DP World, has stated, “Modernizing the processes by which logistics operate is critical to building more robust and more efficient supply chains which will help economic development and generate more prosperity.”
Undoubtedly, the warehousing and logistic industry is witnessing unprecedented changes in the Middle East. By relying on technology, warehousing businesses are shifting from labor-intensive facilities to more modern and agile ones.
More investments in micro-fulfillment solutions are expected to take place in order to meet the increasing demands of the market. The focus now shifted to improving the logistics infrastructure, modernizing and automating warehousing, and better controlling their supply chain.
In both short-term risk mitigation strategies and long-term developed strategies, businesses in the Middle East sought to diversify their supply chain for security and stability. Instead of highly relying on Asian suppliers, especially Chinese ones, they refocused their strategies on producing locally whenever feasible.
According to David Stubbs, head of market strategy and advice at JP Morgan Private Bank, companies in the Middle East “will be asked to bring production closer to home, especially for things which are now deemed essential in a way they weren’t only a few months ago, such as medicines and medical equipment.” He continues to state that “China may not be the workshop of the world that it once was in a few years. It’s a gradual process, but I think it’s an important one.”
Nevertheless, national and regional production is somehow limited by the available skills and capacities. Also, there is a need to maintain close ties with already-established and rising suppliers and clients ‘in the key Asian, European, and American markets.’
Key players in the Middle East are putting great efforts to improve the eCommerce supply chain by refocusing and replanning their strategies in different areas, including:
The online retailer supply chain process should not be considered the same as the conventional one.
Middle east eCommerce players continue to plan custom strategies that fit well with industry requirements in order to maximize the leverage from this redesigned process. Innovative solutions to inventory management should be considered in order to meet the growing demands of e-commerce consumers.
A solid IT infrastructure is essential for an effective supply chain management. IT solutions help maximize efficiency, reduce manual tasks and human error and accelerate the different operational processes.
Today, eCommerce businesses in the Middle East and worldwide seek tech-based solutions that offer effective and efficient warehousing, order, inventory, shipping, and delivery management systems to scale up their businesses.
While the mindset of cash on delivery in the Middle East still exists, the region is constantly adopting new payment models, including credit cards, online wallets, Internet Banking, and more; facilitating and enhancing the user purchasing experience. These models should be trustworthy and reliable so that consumers are more likely to use them to make online transactions.
Warehousing plays a significant role in any eCommerce business. That’s why it is considered a key element in effective eCommerce supply chain management. Nevertheless, with today’s increased consumer demands, a conventional warehouse cannot beat the game. What’s needed is a modern, optimized warehouse infrastructure with the right equipment and the latest technologies to ensure smooth, efficient, and accelerated operations.
The locations of distribution centers are critical for consumer satisfaction (delivery-time-wise). Once a consumer places an order online, the product should be packed and shipped as early as possible. That’s why, they should be strategically situated near to the consumers in order to improve the last mile delivery speed. Route mapping and transportation models should be carefully studied and planned for higher performance and more productivity.
While it’s difficult to anticipate what the future will hold, it is feasible to mitigate against certain challenges like public lockdowns, delayed shipping, and inconstant demand spikes. The significant eCommerce growth and change at the level of the supply chain will depend on how businesses in middle-eastern countries adopt these new technologies and continue to work on effective strategies to overcome barriers- mainly logistics.