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Asia Logistics Conference explores e-Commerce impact on supply chain ecosystems

Mark Millar explains the impact of the explosive growth in e-Commerce on logistics networks and supply chain ecosystems from the Asia Logistics and Maritime conference

Industry leaders discussed the latest trends and developments in the Supply Chain, Logistics and Maritime sectors at the recent Asia Logistics and Maritime conference - hosted by HKTDC at the Conference and Exhibition Centre in Hong Kong and attended by over 1,500 logistics providers and users from 26 countries and regions.
 
The conference opened with the keynote address from HKSAR Government Chief Executive CY Leung outlining Hong Kong’s enduring strengths, including its free port status, sophisticated financial system, robust rule of law and the common law system underpinned by an independent judiciary. These qualities provide favourable conditions for expanding professional maritime services including shipping management, finance, marine insurance, legal services and arbitration services. He outlined how Hong Kong as an international business hub and a logistics super- connector, links the mainland of China to the rest of the world.
 
CY Leung also announced that Hong Kong is preparing to negotiate a Free Trade Agreement (FTA) with the 10-member ASEAN bloc. The Hong Kong-ASEAN FTA will help to strengthen trade and logistics in the Asia region and add to the competitiveness and efficiency of regional supply chain ecosystems.
 
The first plenary session entitled “Shaping the Future of Asia: The Emerging Dragons” explored how Intra-Asia trade has become the driving force of global trade.  George Yeo, Chairman of the Kerry Logistics Network, predicted that the mainland will be the immediate focus. “Looking at the trends, China’s trade with its neighbourswill overtake even its trade with the United States and the European Union,” he said. As Hong Kong proceeds to negotiate its own free-trade agreement with the ten ASEAN nations, the city’s role in the region is evolving - Robert Li, Executive Director of the Lenovo Group’s Supply Chain for Asia Pacific, said Hong Kong’s success as a regional hub for the logistics and maritime industries firmly puts the city in an enviable position.
 
The second plenary session explored the impact of the explosive growth in e-Commerce on
logistics networks and supply chain ecosystems, for which the Hong Kong Trade Development
Council (HKTDC) engaged me as Panel Chair. To set the scene for this session entitled “Retail
Revolution: a Brave New World”, I outlined the three mega-forces that are reshaping the retail
industry - with material and lasting impact for all stakeholders:
 
  1. the Asia Era, whereby the centre of economic gravity has firmly shifted eastwards
  2. the Digital World, in which the internet is all pervasive and consumers are increasingly digital natives
  3. the Mobile World, where the proliferation of smart hand held devices is driving consumer behaviour and related social dependencies
 
The Retail Revolution panellistsincluded Mr Shi Tao, Vice President of the JD.com Group, who confirmed that 2013 was the milestone year when China surpassed the USA as the world’s number one e-commerce market. There are already 250 million online shoppers on the mainland, 70 percent more than two years ago, with 32 per cent growth expected in the next three years. In this highly competitive landscape, the trend is showing more growth in business-to-consumer (B2C) e-commerce than consumer-to-consumer (C2C). Mr Shi stressed that to gain competitive advantage, companies must focus on last-mile delivery.
 
Scott Price, President and CEO of Walmart Asia, advised that 45 per cent of the global 2.7 billion internet users are in Asia, compared to 21 per cent in Europe. He confirmed that it is critically important for Walmart, and other retailers, to perfect the logistics and keep costs down, while straddling the online and bricks-and-mortar worlds.
 
Whilst e-commerce is definitely here to stay - “if you’re not online, you’re not in retail” - the panellistsall agreed on the importance of improving last-mile delivery to the third-, fourth- and fifth-tier cities and rural areas throughout the emerging and developing markets in Asia.