Online shopping brings new opportunity

BANGALORE, INDIA: With increasing facility and availability of products on the Internet, Online shopping(direct consumer business) is becoming a promising segment for the Supply Chain Management (SCM) companies bringing growth prospects along with some challenges.

The vertical is poised to show doubled growth in next three to five years, from the present growth rate of 19 per cent year-over-year.

Eddie Capel, executive vice president for Global Operation - Manhattan Associates, a supply chain optimization company said, “Online shopping or e-shopping is the process of direct consumer business where consumers purchase products or services over the Internet. Currently, total online purchases would account for six-seven per cent of the total purchases that occur across globe.” He estimated that within a few years this would reach to 15-20 per cent of the total sales which is expected to be the peak situation.

Speaking about the opportunity, Capel said, “Direct consumer business like online shopping is different from other delivery processes as the shipments are done on individual demand basis and not bulk orders.

Therefore, it becomes necessary for companies to have a supply chain management software to ensure smooth and managed delivery in right time and right place.”

He added that major issue faced by companies is the rejection of the delivered product.

“Around one third of the products are returned back. In this case, collecting and sending the materials back from various points and giving back the right product is very important. Apart from transport and distribution management, companies also look for a robust forecasting and planning software, and after the sudden advent of slowdown leading, resulting in decline of sales has spurred demand for the forecasting solutions,” he said.

He informed that apart from online shopping, other growing verticals are food delivery, life sciences and hi-tech.

Manhattan Associates expects to leverage on this opportunity with its solution-SCOPE. According to the company, SCOPE has got a broad range of solutions like of planning and forecasting, inventory optimization, order life cycle management, transportation life cycle management and distribution management.

The company boasts to have around 1,200 global customers such as Adidas, Dell, Walmart, Papa John's and Staples. It has a 19-year old legacy of specialization in Warehouse Management system (WMS) and Transportation Lifecycle Management.