In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities.Demand for international consumer products (including long-tail items) is growing much faster than in-country supply from authorised distributors and e-commerce offerings.There are orders from metro cities and also from far off places.
Increase in supply of products and lack of logistics in far off places can be a challenge for e-retailers. Few e-retailers have their own logistics network for intra-city and rely on third party services for inter-city. Others depend totally upon Third Party Service Providers (TPSP). Having warehouse at all places is also not cost effective solution. TPSP mostly use surface network to deliver the goods as this is the choice provided by e-retailers to keep their distribution cost low. Utilizing air network for delivery would be more costly.
Challenges in E-Commerce Supply Chain:
- Huge surge in the customer demand, especially during festive/special days
- Inventory Management issues by regular distributors
- Cross-border government policies, taxes and economic barriers
- Cash collection
- Reverse logistics/Returns
- Micro-markets/Third and Fourth tier reach