Problems that retailers normally face with logistics providers include late deliveries, damaged and lost parcels, negative attitudes from delivery people and slow cash-on-delivery processes. These problems could leave customers with a negative impression of the retailer, causing customer loss.
To counter this problem, the study recommended retailers to build their own logistics networks, outsource to third-party providers, or form partnerships and acquire existing providers. However, hybris noted that in-house logistics might not be a viable long-term solution as e-commerce market growth will cause them to be unsustainable. Strategic partnerships between strategic between e-commerce firms and third logistics provider might therefore be the better option.
"As the overall geographic coverage of the Chinese e-commerce market expands, the ability to offer reliable and consistent services and delivery will be the major source of competitive advantage," says A.T. Kearney partner and study co-author Mui Fong Goh.
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