The surge of eCommerce in the Philippines during and after the pandemic rewrote many companies' engagement rules. With a population increasingly embracing the ease and variety of online shopping, business owners are on the edge of a transformative wave of opportunities.
Yet, concealed behind the facade of every thriving online storefront is a mess of operations – the eCommerce supply chain – a system that introduces unique challenges begging for innovative solutions.
Each stage in this digital relay race demands attention and practical strategies, from managing inventory to ensuring seamless order fulfillment. If you’re an entrepreneur trying to determine how to tackle the supply chain in the Philippines, this guide is for you.
Understanding the eCommerce Supply Chain
At its core, the eCommerce supply chain involves a dynamic network of interconnected components, each playing a vital role in the journey from product inception to its distribution to the consumer:
- Sourcing - identifying and partnering with suppliers who provide the raw materials or finished products is vital for the eCommerce business.
- Inventory management - maintaining optimal stock levels to meet demand and avoid stock outs or overstock situations that can hinder the efficiency of the supply chain.
- Order fulfillment - the methods of processing and dispatching customer orders promptly and accurately, from a customer’s cart to the delivery truck.
- Delivery - the crucial last leg of the journey ensuring products reach customers promptly and satisfactorily.
A flaw in one aspect of the system can ripple through the chain, affecting customer experience. Due to customer satisfaction creating brand advocates, businesses that overcome their supply chain challenges will find themselves at the forefront of their competitors.
Philippine eCommerce supply chain trends
The infusion of digital technologies into the supply chain is becoming more widespread. From end-to-end tracking to real-time data analytics, leveraging digital integration to enhance operational transparency and agility can give you an edge.
eCommerce platforms such as Lazada and Shopee are still the most popular, as they offer a variety of products and provide tracking and cashless payment options for customers. They also give shop owners analytics tools to provide them with insights.
Logistics is an element that is going to see some eCommerce challenges. The post-pandemic Philippines is seeing a rise in demand for express delivery services and a reliance on suppliers, which may require you to evaluate your entire distribution system.
Localization of distribution centers, partnerships with local couriers, and utilizing technology for efficient route planning are becoming integral to timely and reliable deliveries.
5 eCommerce Supply Chain Challenges and Their Solutions
There are several supply chain challenges a brand might face in the digital space. Here are some of them, as well as eCommerce strategies that you can implement.
1. Sourcing reliable suppliers
Identifying and maintaining relationships with trustworthy suppliers can be daunting, as they must keep providing a steady supply of products. A disruption on their end also affects your shop, which could mean delays in shipment and delivery.
Do research on reliable suppliers and foster a relationship of collaboration and communication. Zalora is one such platform, as they have ties to various local and international brands to deliver a diverse catalog of fashion pieces to their customers.
2. Overstocking/stockouts
Managing inventory can be tricky and harm the bottom line if you overstock or stock out. While this could take some time to learn due to your customer’s purchasing habits, you can use software for forecasting.
Techniques like Just-In-Time (JIT) inventory help minimize storage costs. Many brands that offer customization services on platforms like Shopee only start production after a pre-order period, avoiding excess inventory.
Some brands also turn to dropshipping to skip out on holding inventory altogether, preferring to rely on their partners to fulfill orders.
3. Shipping/delivery complexities
Labeling packages and coordinating logistics teams can be challenging if you have high demand and large orders. Filipinos also purchase around events such as payday or holidays, adding another layer of complexity to shipping their orders.
Try to streamline warehousing operations and invest in accurate labeling and quality checks. You can also implement batch processing and automation for quicker order processing.
4. Difficulties in last-mile delivery
The Philippines has several islands, so getting the product to every customer’s door can be challenging. Hiring a team of drivers could be too expensive, so many turn to local couriers and pickup options to enhance convenience.
Some examples of last-mile delivery services that cater to the entire country are Lalamove and J&T Express. They have different branches across each region in the Philippines with several drivers under their employ so deliveries can arrive promptly.
5. External factors and seasonality
External disturbances, such as natural disasters and economic uncertainties, can impact supply chain stability. The Philippines experiences around 20 tropical cyclones annually, and these events make it more challenging to process deliveries.
Use past data and market trends for accurate forecasting, enabling flexibility in response to changing customer preferences. Lazada, for instance, puts up notices for customers during peak seasons like 6.6 or 11.11 that orders will take longer due to the volume.
One Chain for Seamless Success
Supply chain management is a delicate process that could collapse without adaptability and the proper tools. As more businesses go digital, staying ahead means implementing solutions that improve the entire process.
From user-friendly interfaces to the transformative power of RFID, IoT, and AI, technology enhances visibility and optimizes every link in the chain.
To further elevate your operations, you’ll need a strategic partner capable of handling supply chain complexities you may face. RUSH’s eCommerce solutions stand out as an invaluable asset for businesses that are refining their supply chain management.
RUSH's eStore is an all-in-one eCommerce platform with robust features such as inventory management, order processing, and seamless logistics coordination. The platform is equipped to optimize and streamline your supply chain processes, along with tools designed for scalability. From reliable inventory tracking properties to real-time analytics, it allows businesses to navigate complexities efficiently and foster growth.
Book a demo today to discover how RUSH can boost your supply chain and operations, propelling your business toward success in the digital landscape. We aim to provide you with the right tools for every stage of your eCommerce journey. Start growing your business with RUSH today!
