1

E-Commerce Logistic
Chanllenges
 MARKET OVERVIEW
2

Riding on huge opportunity in Ecommerce

Market Size (US$ mil)
10,000 1,000
Ecommerce only represents 0.6% of total retail
9,182
consumption in Vietnam in 2015…

7,500 750

6,012

US$85.3bn
5,000 500
Retail
Consumption 4,026 472

361

2,500 2,180 290 250

0.6%
Ecommerce 196
969
512 103
61
0 0
2015 2016 2017 2018 2019 2020
Note: Market size est. in-house by surveying local players, assuming Vietnam E-commerce market will Ecommerce Ecommerce delivery
follow growth trajectory of neighboring countries (China)
MARKET OVERVIEW
3
Delivery requirements continuously be more sophisticated

Vietnam E-Commerce High expections

✓85% - 90% COD transactions ✓Short Lead-time

✓Real transaction is at delivery ✓High level of customer service

not online
✓Acceptable cost
✓Small package with low value
(~$20) ✓System and automation

✓High volume of small pakages ✓Real-time and transperant

CURRENT SITUATION
4
Average delivery lead-time improved but still high
4

3 3

2
2

1
1

2014 2015 2016 Expectation

Avg Lead-time(days)
 CURRENT SITUATION
5
Delivery cost per package is high: 13% value
current cost structure

✓High over-head cost

16%
Overhead
✓In-sufficient linehaul cost 9% Collection
9%
Sorting
30%
✓Last-mile cost still high because
Linehaul
of scale
36%

✓Total cost ranges from 45-50k

vnd/package Lastmile

Note: number in chart is based on estimated average number of some logistics company in vn
CURRENT SITUATION
6
Fail delivery still very high: 12%
3

Cannot connect with customers

Controllable factors

2
Service by couriers

Objective factors:
product, wrong,..
MARKET OVERVIEW
7
Technology and system application is limited

✓Track and Trace system

✓Proof of delivery

✓System intergration

✓Real-time tracking

✓BI and control system

✓TMS
SOLUTIONS? 8
GHN’s STRENTH: OPERATIONS & TECHNOLOGY
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Operating model optimizes efficiency for e-commerce
Hub & Spoke + On-demand point to point: How 40k packages go through our system each day?

GHN Station: GHN station:

• 35 drop-off points • 35 pickup stations

Sorting Hub:
• 4 Sorting Hub (4,000 m2)
• 100 employees

Linehaul Linehaul
Merchant
Air/Truck Air/Truck Receiver
GHN Hub Home delivery:
• 100 sorting hubs • 3.500 drivers

Pickup/ Drop-off & Return Linehaul & Sorting Last-mile network

Well controlled by transparent system and 5-star policy

GHN’s STRENTH: OPERATIONS & TECHNOLOGY
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On-demand instant delivery service Ahamove

✓Sept 2015 beta launch in Hanoi and HCMC, Ahamove

is on-demand instant package delivery platform
✓~5,000 freelance drivers
✓~5,000 packages delivered daily, of which 1,500 are
food deliveries
✓60% Ahamove packages come from existing GHN
network, including 60-minute services and GHN hubs
for multiple drop-off points
Product Features:
• Real-time tracking
• Multiple-point pick-up
• Auto-assign driver
• Demand-driven pricing policy ~Uber
WORK TOGETHER
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To build an strong and substainable network

✓Focus to core
compentencies
✓Invest to system to
System & technology
manage and optimize
 NEXT TRENDS
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Cross-boarder e-commerce in Vietnam

Cross boarder trend in China
125

100
90 89 88 81 75

75

50

25
25
19
10 11 12
0
2012 2013 2014 2015 2020E
Import model Export model
% import % export

Note: Source of AliResearch

THANK YOU! 13