The impact of e-commerce on warehouse in vietnam

Over the past few years, e-commerce has grown rapidly in Vietnam, contributing significantly to the national economy. Online shopping is becoming increasingly popular, leading to an explosion in demand for warehouse systems in Vietnam to store, manage, and distribute goods. This has fundamentally changed how the warehouse in Vietnam system operates, creating new challenges and opportunities for the logistics industry.

Explosion in demand for warehouse system in Vietnam to store, manage, and distribute goods. 

The development of e-commerce in Vietnam

E-commerce in Vietnam has seen strong growth in recent years. According to a Statista report, revenue from e-commerce in Vietnam is expected to reach about 9 billion USD by 2025. Driving factors include the increase in the number of Internet users, the development of new methods of online payment convenience and the diversity of online shopping platforms.

The relationship between e-commerce and warehouse systems

The development of e-commerce brings with it the need for a more efficient and flexible warehouse system. The warehouse system not only plays the role of storage but also serves as a distribution center, ensuring that goods are transported to consumers quickly and accurately. Therefore, optimizing the warehouse system becomes extremely important for e-commerce businesses.

An increase in warehouse demand

E-commerce sharply increases the demand for warehouse in Vietnam, due to the constantly increasing number of online orders. Customers demand faster delivery times, which requires businesses to have goods available near the consumption area and optimize the transportation process.

Growth of online orders

With the increasing number of online orders, businesses need to expand warehouse area and improve processing capacity. This includes investing in modern warehouse management systems, ensuring order processing is quick and efficient.

Requirements for speed and flexibility in delivery

Today’s customers expect to receive goods in the shortest time possible. This requires the warehouse system to be flexible, capable of handling many orders at the same time and ensuring high accuracy. Delays or errors in delivery can have negative impacts on a business’s reputation.

New warehouse models in Vietnam

To meet increasing demand, many businesses have applied new warehouse models such as:

Smart warehouse

• High automation with robot systems, sensors, IoT and warehouse management software (WMS).
• Collect and analyze real-time data to optimize warehouse operations.
• Integrate AI solutions to predict demand, optimize storage locations, and automate processes.

On-demand warehouse (3PL)

• Businesses rent warehouses and warehouse management services from third-party logistics service providers (3PL).
• Flexible solution, suitable for businesses with fluctuating warehouse needs or who do not want to invest in warehouse infrastructur

 Third-party logistics (3PL)

Fully automated warehouse

• Use robots and automation systems to perform most warehouse tasks, from warehousing to warehousing.
• Little or no human involvement is required.

Distribution center

• Combine storage and distribution functions.
• Strategic location to optimize shipping time.
• Providing value-added services such as:

Packaging and labeling

Product assembly.

Order management.

Multi-channel warehouse

• Store goods to serve many different sales channels such as direct retail, e-commerce, multi-channel sales,…
• Manage and process orders from multiple channels effectively

Applying technology in warehouse in Vietnam

Technology plays an important role in improving warehouse management efficiency in Vietnam, from applying AI and IoT to integrating ERP and WMS systems.

AI and IoT applications

AI and IoT help improve inventory tracking and management. IoT sensors can monitor environmental conditions and cargo location, while AI can forecast demand and optimize operational processes.

Integrate ERP and WMS systems

ERP (Enterprise Resource Planning) and WMS (Warehouse Management System) systems help manage warehouses comprehensively. The integration of these two systems allows tracking the entire process from importing, storing, order processing to delivery, ensuring high synchronization and accuracy.

Challenges for traditional warehouse in Vietnam

Traditional warehouses face many challenges in meeting the demands of an omnichannel strategy. Here are the main challenges:

Traditional warehouse systems in Vietnam

Lack of flexibility in operations

Traditional warehouses are often designed to serve one or a few specific sales channels. When moving to an omnichannel strategy, flexibility to handle different requests from multiple channels becomes crucial but difficult to implement.

Outdated technology

Many traditional warehouses use old technology systems that cannot integrate with modern management systems such as warehouse management systems (WMS), order management systems (OMS), and warehouse management systems. customer relationship management (CRM). This leads to a lack of synchronization and ineffectiveness in operations.

Inaccurate inventory management

Managing inventory accurately and synchronously across channels is a big challenge. Traditional warehouses often struggle to accurately update and track inventory levels, leading to unwanted shortages or surpluses.

Execution time visibility and tracking

Customers expect to be able to track order and inventory status accurately and in real time. Traditional warehouses often lack the technology to provide this capability, leading to customer dissatisfaction.

Return processing

Returns processing is an important part of an omnichannel strategy. Traditional warehouses are often not designed to efficiently handle returns processes, leading to increased costs and decreased customer satisfaction.

Conclusion

E-commerce has been having a profound impact on the warehouse in Vietnam. To meet increasing demand, businesses need to invest in technology, optimize processes and apply new warehouse models. This not only helps improve operational efficiency but also contributes to enhancing customer experience. In the future, the development of warehouses will continue to be associated with the development of e-commerce, creating many new opportunities for the logistics industry in Vietnam.

>>> See more: 10 things to consider when choosing a warehouse for lease in Vietnam