Our Founder and CEO Arne Jeroschewski was recently invited as a guest on Singapore’s radio channel Money FM 89.3 by Elliott Danker to exchange views on e-commerce logistics in Southeast Asia. Based on our recent study with data from 80,000 consumers, we saw that despite Southeast Asia being the fastest growing region for e-commerce, delivery remains to be the biggest challenge with over 90% of complaints due to late deliveries and a lack of communication during the delivery process.
Listen to the interview here or read the transcript below.
Elliott: Who doesn’t like doing some online shopping? But after you made your payments online then the waiting game begins… When is my parcel going to arrive? Will I be at home when my parcel gets delivered? Can I rely on this parcel tracker?
I am sure you have asked yourself these questions before and I recently encountered that – a little disappointed by it. But, a recent survey was done by Parcel Perform and iPrice Group and they have shown that 34% of Southeast Asian’s consumers continue to see parcel deliveries as their biggest pains.
By Southeast Asia, I am talking countries like Singapore, Malaysia, Vietnam, Thailand, and Indonesia, these were the countries that were surveyed. What were the results like for Singapore? How are we different from our Southeast Asian counterparts?
Are Singaporeans really happy? Are we happy with our delivery service? Well, in the studio this morning to help me out with these questions is Arne Jeroschewski who is the Founder and CEO at Parcel Perform.
Arne: Good morning, great to be here.
Elliott: Tell us a little bit about Parcel Perform, how is it different from SingPost, or DHL?
Arne: We are a software company where our focus is on technology and data. We don’t own trucks or warehouses. Our customers are the ones that track the data and want to know more about their deliveries. They could be consumers or businesses who care about their deliveries. Parcel Perform helps them make better use of the delivery companies you mentioned.
Elliott: And if you were to put these delivery companies in the spotlight together with Parcel Perform, how have you fared against them?
Arne: We make sure that our customers have all the information they need in order to take the right decisions on which delivery company to use. Some have their strengths in certain areas and we helped them to uncover those strengths.
Elliott: Let’s talk about this survey that I am sure everyone is probably agreeing with. 34% of Southeast Asian consumers not happy with their delivery service. What specifically is the issue that pops up in this survey?
Arne: I think one of the biggest issues is that parcels do arrive late occasionally because they get delayed on the way, a lot of deliveries come from overseas and there’s a good chance that they get held up at customs and borders or on the way, so that’s where the main point of frustration is.
Elliott: Yes, I recently encountered the situation where the tracking app showed that it had arrived in Singapore and it has been dispatched for delivery when in fact it was still stuck at customs. How can this issue be overcome? Is this even possible?
Arne: With the development of e-commerce, which has been growing more than 60% over the last 3 years, a lot of delivery companies invest a lot in technology and building better operations, so actually, the experience consumers receive these days is much better than years ago.
But at the same time, consumers are getting more demanding. They know what they can expect, they have higher expectations of delivery companies and that’s where I think dissatisfaction doesn’t go away.
Elliott: But I guess if you are so impatient you know you are plugged in online, you got this tracking ID that you can see. You expect things fast fast fast, but this survey was done in countries like Singapore, Malaysia, Vietnam, Thailand, and Indonesia specifically, rather. How do issues differ in each country or is it more or less the same?
Arne: Singapore actually fares very well in terms of delivery performance, partly because of its nature. It’s a smaller country, delivery partners are a lot more sophisticated, there’s a lot of connectivity into China or other markets where products come from.
At the same time Singaporeans customers are very demanding, have high expectations of their service providers, and therefore those factors play against each other, but also, Singapore has a high penetration of very advanced delivery options like locker systems, etc; therefore, they also receive a better experience than they would get in other markets.
Elliott: Okay, this is for people addicted to things like Taobao.
We did talk about how people are not happy with their delivery service, parcels coming late is obviously top of the list, Singapore is generally okay, but what about the rest of Southeast Asia? What are they happy about? What are the positives?
Arne: Well for other countries outside of Singapore, users offer cash on delivery. There are a lot more re-scheduling possibilities with delivery service providers because if you require the cash to be at hand, there’s a much more engaged delivery process than what consumers are used to here in Singapore.
I think with that, these are the things or the strengths in other markets, not so much relevant in Singapore, but one of the things that contribute to their satisfaction, overseas in other markets
Elliott: And also for some of these markets, they are still developing so they will get to enjoy that progression.
The survey we had been talking about has found that over 90% of customers complaints are tied to transit time and late delivery. Should some kind of terms and conditions be set up between businesses and delivery service companies? Would that help?
Arne: I think what we are seeing is right now, the consumers have to look at tracking results which are not very intuitive ways of figuring out when the parcel may arrive.
What we are seeing now in other markets outside of Asia is that the delivery companies focus on telling the consumers when they expect a parcel to arrive, which is essentially what the consumer wants to know.
This is the next evolution point plus there would be much more options on where parcels can be picked up; lockers, delivery points, re-scheduling, re-directing to a neighbor or friend. Those options will come up in the next few years – in Asia for sure and probably in Singapore as the first market here. I think that adds a lot of convenience to the delivery experience for everyone.
Elliott: Is this something that Parcel Perform is looking into? How can you guys perhaps overcome this problem?
Arne: So what we are doing as a platform is helping delivery companies make sure that these experiences are available to consumers, so every merchant can use re-direction features, sees different delivery options at the checkout. This is the part we support the merchants; to make sure they offer the widest range of possible delivery options to their consumers and hence contribute to higher customer satisfaction for them.
Elliott: In this survey, was there anything else that stood out with regards to Singapore consumers? Do we look like a very difficult crowd to please?
Arne: The main driver for satisfaction is the delivery time. If it takes very long, we see customers satisfaction drop to half if it takes just 2-3 days longer. So from that perspective, I think being on time is super important, and I think the second element is whatever kind of expectations the merchants set for the consumers, let’s say the product is to be delivered in 5 days, that’s what the consumers will hold the merchants to.
With that, if the merchants can be very accurate in predicting when it is going to arrive, customers will accept it because they know at the time of the purchase of the parcel what they can expect. If not there will be dissatisfaction very quickly.
Elliott: When you say long, do you have a gauge of time; anything more than 5 days, perhaps? This is without some form of express delivery, I am assuming.
Arne: Sure sure, I think when we started e-commerce about 5 to 7 years back, everyone was just happy if they receive their parcel, now, everybody knows they can expect that, so everyone is thinking of next day delivery or even same day delivery.
I think the bar for delivery companies is rising continuously, therefore I think we will see a lot faster deliveries across all categories and all merchants and I think that’s something to look forward to.
Elliott: I tell you when I am shopping online, if I ever shop online and I see that it’s going to take me 2 weeks to get this product, I won’t even bother buying it, I am an impatient human being.
Parcel Perform, in 5-10 years time, where do you see you guys, what’s the expansion plan like?
Arne: Our expansion plan is geography, we already have customers that are in Europe, Australia, and the US. We’re expanding there because of our service offering; to deliver a better experience to consumers is a problem that is international and we feel that we can help merchants across the world to get better.
The other area of expansion is we are improving our product. We’re employing Machine Learning and other technologies to have better predictions of what is happening in the delivery chain That’s ultimately what will help consumers to understand and pick the right partners in order to get a better experience for themselves.
Elliott: Actually just an impromptu one here, based on what you have seen, especially in Southeast Asia, which is the most difficult market to service?
Arne: I think probably it’s Indonesia. That’s mostly because of its geography. Indonesia has many islands. The delivery process is complex; perhaps involving boats and airlifts. Also, everything becomes a little less predictable due to bad weather. You don’t have these challenges in Singapore but it is very common over in Indonesia. Consumers expect that, so they are a little more forgiving with their delivery companies.
Elliott: Thank you for taking the time this morning
Read here for more information on the study we did with iPrice Group involving 80,000 e-commerce consumers across Southeast Asia. Want to speak to our team or our founders? Get in touch with us here, or contact Arne and Dana through LinkedIn.
Joshua is the Marketing Manager at Parcel Perform. He loves technology and a good book. Outside of e-commerce and Parcel Perform, you can find him in the kitchen, gym or yoga studio.