Develop logistics system to meet the requirements arising from e commerce industry in vietnam

BANKING ACADEMY INTERNATIONAL BUSINESS FACULTY BACHELOR’S THESIS - SUMMARY DEVELOP LOGISTICS SYSTEM TO MEET THE REQUIREMENTS ARISING FROM E-COMMERCE INDUSTRY IN VIETNAM Student’s name: Tran Thi Van Anh Class: K20KDQTD Intake: 20 Student’s ID: 20A4050040 Advisor: Dr Nguyen Thi Thanh Tan Hanoi, May 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014126154681000000 ANNOUNCEMENT I want to declare that this thesis is my own independently researched work Statistics used for analysis purpose in this thesis have clear and well-founded origins and was published legitimately in accordance with the current applicable Vietnamese regulations Research findings in this thesis are my independent, factual and objective work that is in agreement with the situation in Vietnam These findings have not been published in any other studies before at the time of this thesis’s completion Hanoi, May 24th, 2021 Student Tran Thi Van Anh i ACKNOWLEDGEMENT Having received the honor to participate in the thesis stage at the end of the curriculum, firstly I want to express my deepest gratitude to the Banking Academy and the honorable staffs and professors who have always accommodated me with the most favorable conditions and have also offered me the best learning environment so far I also want to send my thanks to Dr Nguyen Thi Thanh Tan who has helped me greatly and devotedly during my researching time so that I could finish this thesis in a timely manner Concurrently, I would also like to say thanks to the professors and staffs in the International Business Faculty and friends who have supported me in the completion of this thesis Lastly, because of my unavoidable lack in theoretical reasoning and practical experience, this thesis may not be a faultless production Therefore, I would eagerly hope to receive valuable feedbacks as well as ideas of suggestions from your honorable readers so that I could perfect my work better Thank you for your understanding and support up until the moment I really appreciate your patience and hope that we could have a successful Thesis Presentation round ii CONTENT ANNOUNCEMENT i ACKNOWLEDGEMENT ii TABLE OF ABBREVIATIONS vi LIST OF TABLES AND FIGURES vii INTRODUCTION 1 Research motivation Literature review Research purpose 4 Research object and scope 4.1 Research object 4.2 Research scope 5 Research methodology Structure of the thesis CHAPTER 1: THEORETICAL BASIS OF LOGISTICS AND LOGISTICS IN E-COMMERCE 1.1 OVERVIEW OF LOGISTICS 1.1.1 Definition of Logistics 1.1.2 Role of logistics 1.1.3 Characteristics of logistics 1.1.4 Classification of logistics 11 1.1.5 Factors affecting the development of logistics system 14 1.2 OVERVIEW OF E-COMMERCE AND LOGISTICS IN E-COMMERCE 16 1.2.1 Definition of e-commerce and logistics in e-commerce 16 1.2.2 The necessity of logistics for e-commerce 18 1.3 THE MAIN ACTIVITIES OF LOGISTICS IN E-COMMERCE 19 iii 1.3.1 Storage 19 1.3.2 Prepare orders 20 1.3.3 Shipping 20 1.3.4 Delivery at the seller's warehouse (buy online, pick-up in-store or purchase online) 20 1.3.5 Delivery method at the buyer's address (Buy online, ship to store) 21 1.3.6 Dropshipping 21 1.3.7 Last-mile delivery 21 SUMMARY OF CHAPTER 22 CHAPTER 2: THE DEVELOPMENT OF LOGISTICS SYSTEM FOR ECOMMERCE IN VIETNAM 23 2.1 CURRENT SITUATION OF LOGISTICS SYSTEM IN VIETNAM 23 2.1.1 General situation 23 2.1.2 National Logistics capacity ranking index of Vietnam 24 2.1.3 Legal policy and state management of logistics in Vietnam 26 2.1.4 Logistics infrastructure in Vietnam 26 2.1.5 Human resource in Vietnam 31 2.1.6 Logistics service enterprises 32 2.2 LOGISTICS IN E-COMMERCE IN VIETNAM 33 2.2.1 The growth rate of e-commerce in Vietnam 34 2.2.2 Current situation of logistics in e-commerce in Vietnam 35 2.3 EVALUATING THE CURRENT SITUATION OF VIETNAM’S LOGISTICS SYSTEM IN E-COMMERCE 38 2.3.1 Achievements 38 2.3.2 Drawbacks and reasons 40 SUMMARY OF CHAPTER 45 iv CHAPTER 3: SOME SUGGESTIONS AND RECOMMENDATIONS TO DEVELOP LOGISTICS SYSTEM TO MEET THE REQUIREMENTS ARISING FROM E-COMMERCE INDUSTRY IN VIETNAM 46 3.1 DEVELOPMENT TRENDS OF THE E-COMMERCE INDUSTRY 46 3.2 LOGISTICS AND E-COMMERCE DEVELOPMENT ORIENTATION OF THE GOVERNMENT 48 3.2.1 Logistics orientation of the government 48 3.2.2 E-commerce orientation of the government 49 3.3 SOME SUGGESTIONS AND RECOMMENDATIONS TO DEVELOP THE LOGISTICS SECTOR FOR MEETING THE REQUIREMENTS ARISING FROM THE E-COMMERCE INDUSTRY IN VIETNAM 51 3.3.1 For the Government 51 3.3.2 For Vietnam Logistics Business Association 53 3.3.3 For universities, colleges, and logistics training institutions 54 3.4 SOLUTIONS FOR BUSINESS TO DEVELOP THE LOGISTICS SECTOR FOR MEETING THE REQUIREMENTS ARISING FROM THE E-COMMERCE INDUSTRY IN VIETNAM 55 3.4.1 Promote links between Logistics businesses and e-commerce businesses 55 3.4.2 Promote the application of information technology and automation in logistics 55 3.4.3 Improve the quality of human resources 58 3.4.4 Enhance the development of e-logistics 59 SUMMARY OF CHAPTER 61 CONCLUSION 62 v TABLE OF ABBREVIATIONS Abbreviation Explanation 1PL First Party Logistics 2PL Second Party Logistics 3PL Third Party Logistics 4PL Fourth Party Logistics 5PL Fifth Party Logistics AI Artificial Intelligence APEC ASEAN B2C CSCMP Asia-Pacific Economic Cooperation Association of Southeast Asian Nations Business To Consumer Council of Supply Chain Management Professionals GDP Gross Domestic Product LPI Logistics Performance Index MTO OECD Multimodal Transport Operator The Organization for Economic Co-operation and Development OMS Order Management Systems TMS Transportation Management Systems UNCTAD UNESCAP VDSC The United Nations Conference on Trade and Development United Nations Economic and Social Commission for Asia and the Pacific Viet Dragon Securities Company VECOM Vietnam E-Commerce Association VIFFAS Vietnam Freight Forwarders Association VLA Vietnam Logistics Business Association WMS Warehouse Management Systems vi LIST OF TABLES AND FIGURES Figure’s Name Figure Page Figure 2.1 LPI of Southeast Asian countries in 2018 24 Figure 2.2 The proportion of Logistics costs to revenue 33 Figure 2.3 Emerging Market Logistics Index 2021 34 Figure 2.4 Estimated E-Commerce and E-Logistics market size (EUR mn) vii 36 INTRODUCTION Research motivation Along with the trend of technology development worldwide, e-commerce in Vietnam is gradually forming and developing strongly Facing the booming of ecommerce in Vietnam, businesses replace traditional commercial forms to access payment methods and online transactions These have helped them have many opportunities to open up in the short term, maximize their competitive advantages, and at the same time facilitate the improvement of the economy Having said that ecommerce is a bright spot in the renovation of Vietnam's current economic structure and a substantial contribution to promoting economic development However, logistics for e-commerce is currently a challenge for businesses doing business in these two fields Consumers can easily search for desired products with a mobile phone or computer with an internet connection However, this has become a problem limiting the development of e-commerce in our country Since most websites providing online shopping services today act only as a bridge between buyers and sellers, this legal laxity is a condition for defrauding goods when shopping online Although e-commerce in Viet Nam is developing at a high speed, there are still many outstanding problems such as counterfeit goods, quality goods, goods received are not like pictures posted on the website, payment risks, time delivery, shipping error According to experts, logistics services in Vietnam have not kept pace with the development of e-commerce Even logistics is considered a hard preventing the growth of e-commerce E-commerce wants to continue in the current development trend, it needs to go hand in hand with the development of logistics services because logistics is the last stage to create a perfect international trade cycle So how to create a close link between e-commerce and logistics to take advantage of and promote the advantages of each side to accompany development? What requirements does e-commerce impose on logistics services and the ability of Logistics services to meet those requirements? Finding the answer to the above problem requires in-depth and comprehensive studies in the development of logistics services to meet the requirements of e-commerce in Vietnam Besides, it is necessary to analyze and evaluate the current situation of the logistics and ecommerce market in Vietnam Since then, find solutions, and contribute to supporting logistics services to develop and catch up with the needs of e-commerce, especially in the context that Vietnam is participating in the process of international economic integration The thesis aims to study and analyze the relationship between logistics and e-commerce Also, make recommendations and suggestions for the current situation Literature review Logistics in e-commerce has been the main topic in a wide of books, studies and articles Deborah L Bayles (2000) study the best practices, it learns today's best practices for order processing and customization, payment processing, tax processing, shipping, tracking, customer inquiry, accounting, and inventory control, as well as "reverse logistics" involves the return of products Jay Joong-Kun Cho, John Ozment, Harry Sink (2008) examines the relationship between a company's logistics capabilities, logistics outsourcing performance, and company performance Besides, the importance of logistics has been confirmed in the e-commerce supply chain Study results revealed logistics capability to be positively related to firm performance in the e-commerce market Wanwan Zhang, Shiying Fang, Bin Huang (2012) showed that e-commerce is the product of an information-based society Its development has also stimulated the logistics industry on which it depends The importance of logistics in e-commerce is already evident Also, the study fully explores the deficiencies in the management and takes actions to improve it, and then builds an e-commerce logistics management system Zhang Jin Shan (2013) gave readers general reviews of e-commerce logistics and quantitative analysis of trade cooperation activities in China - the leading market for online shopping in the world The logistics Institute-Asia Pacific (2016) presented the e-commerce landscape with challenges and the reasons that limit the development of ecommerce: underdeveloped infrastructure, ineffective door-to-door delivery After that, the author proposes a solution that applies technology, using multimodal