Developing Same-Day Delivery Capabilities

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Case Details:

Case Code : OPER109
Case Length : 20 Pages
Period : 2009-2013
Organization :
Pub Date : 2013
Teaching Note :Not Available
Countries : US; Global
Industry : E-commerce

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Global E-Commerce Industry

E-commerce, the buying and selling of products and services over the internet and other networks, had evolved through several phases since the internet was born in 1973. The internet was seen by many as the realm of techno-savvy people. However, when the World Wide Web (www) and HTML were conceived in 1989, it made the sharing of unlimited data possible in a user-friendly way. By 1993, entrepreneurs and consumers had come to realize the vast potential of the internet for retailing, publishing, and entertainment. In the economic boom that followed, thousands of new internet-based businesses were established and stock markets soared.

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But with the collapse of NASDAQ in 2000, the industry entered a dreary phase. However, by 2003, the sector had recovered and e-commerce firms began to prosper. Businesses found that the internet created wider opportunities, increased operational efficiencies, and derived profits. Consumers also began to increasingly get used to online purchasing. The convenience of fast internet access (wired or unwired) at lower prices, improved infrastructure and laws, evolved consumer preferences, and decreased costs of mobile internet devices fuelled the rapid growth of e-commerce.

With the rapid increase in the number of online shoppers, the global internet retail sales (business to consumer sales) grew to over $1 trillion in 2012 (by 21.1% over 2011), with the US holding the top spot with $364 billion (Refer to Exhibit I for global e-commerce statistics). Japan took second place with sales of $127 billion, followed by the UK ($124 billion), and China ($110 billion). Interactive Media in Retail Group (IMRG), a UK online retail trade organization, estimated that Global B2C e-commerce sales would pass the 1 trillion euro ($1.25 trillion) mark by 2013. eMarketer estimated that e-commerce would grow 18.3% in 2013 and that the Asia-Pacific would grab the number one position with a growth of 30%.

As developed markets were getting saturated, retailers were looking for new paths for global expansion and online trade had become an easy and a low-risk solution for them to expand globally and test new markets. AT Kearney studied the top 30 countries of the 2012 Global Retail Development Index (GRDI) and prepared the E-Commerce Index, which revealed the top countries where online growth would be the highest. According to the index, AT Kearney assessed that China, Brazil, and Russia would be the top three countries with a strong growth in the online retailing sector in the near future.

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