As the development of on-demand retail is entering into a new phase where its coverage is expanding from scenarios of daily necessities buying to purchasing items such as freshly-released mobile phones and cosmetics, the importance of fulfilment is becoming eminent, increasingly.
New opportunities emerging in the ‘micro-distance’ e-commerce for retailers, the future of on-demand fulfilment solutions and industry best practices were among the topics discussed during the 2022 China On-Demand Retail Fulfilment Services Summit.
Themed ‘Micro Distance, Big Consumption & Speedy Fulfilment’, the online forum was hosted by Dada Now and attended by China Chain Store & Franchise Association (CCFA) leaders, industry observers and researchers, leading retail and delivery players.
The event also saw the release of ‘On-Demand Retail Fulfilment Services 2022’, a White Paper prepared by the Research Institute of Dada Group in collaboration with LOGResearch, a think tank expertizing in supply chain and logistics.
As the very first report in industry looking into the on-demand fulfilment, the White Paper proposes a panoramic analysis on the needs, pain points, solutions and future trends of on-demand fulfilment, to provide a professional guidance for industry practitioners.
Fulfilment is not limited to delivery
Experts attending the forum believe a good fulfilment solution should not be limited to delivery, its scope should extend upstream to warehouse management and order picking.
The all-round fulfilment solution integrating processes of warehousing, picking and delivery is becoming a major trend in the industry, according to the White Paper.
“Consumers expect to receive what they ordered in between 30 and 60 minutes, the raison d’etre of the on-demand retail lies in its time-sensitiveness,” commented Jianzhen Peng, Secretary General of CCFA commented.
“Thus the fulfilment ability is by nature very important in the whole buying process. How to improve the efficiency of fulfilment has now become an important issue for the whole retail industry.”
Jun Yang, Co-Founder and CTO of Dada Group, agrees. “The quality of fulfilment is an element often ignored by many yet essential in the development of on-demand retail, it’s the level of fulfilment that determines how strong the growth of on-demand retail can be.”
He also pointed out that beyond delivery, an ideal on-demand fulfilment solution has a lot added value to offer. “An integrated fulfilment solution system covering warehouse management, order picking and packaging, dubbed ‘warehousing-picking-delivery’ fulfilment synergy, is becoming an important industry trend,” weighed in the CTO.
“For merchants in food and drinks, fulfilment process is relatively short, because that does not always involve warehousing, for them, fulfilment is basically delivery,” said Yonggang Pan, Dean of the Research Institute of LOGResearch, “but as to merchants in the on-demand retail, in addition to delivery, they need to take care of processes such as warehousing and picking, which are their major ‘pain points’ to deal with.”
The White Paper provides an in-depth study on the fulfilment needs of diverse types of merchants in on-demand retail, and reveals their problems awaiting to be resolved as well.
For instance, supermarkets may have issues picking orders efficiently facing their large number of SKUs, pharmacies are keen on delivery timeliness, while groceries selling fresh foods have stricter packaging requirements.
The future of on-demand fulfilment
Looking into the future of on-demand fulfilment development, Yang of Dada Group believes there are several industry trends to look at. “The first is all-process integration. Then there is the application of digital tools, for example, the emergence of autonomous delivery service.
“The third would be flexibility, which means a service can be provided to retailers in a flexible way,” said Yang at the forum, from providing solely a service to providing ‘service + system’.
Retailers in China are embracing the booming on-demand retail market. According to the White Paper, in 2021, the number of on-demand fulfilment delivery orders in China exceeded 30 billion, and the number of users has grown to over 600 million. It is expected that the number of orders will exceed 40 billion in 2022, and the number of users will exceed 750 million.