Mailpac shows why logistics matters to Jamaica
Ecommerce has taken off in Jamaica with more room to grow.
Jamaica has seen an explosion of apps from well-established companies pivoting online to start-ups offering a wide variety of services from anything from farm to table delivery, to grocery delivery, to running daily errands, to telemedicine.
One company leading the way is Mailpac.
Ecommerce according to Shopify is defined as:
Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.
This definition is telling as it not only broad enough to capture a wide variety of transactions that go beyond the online retail shopping experience often associated with eCommerce but also makes clear that eCommerce transactions may also be transacted entirely online. Additionally, the definition squarely places eCommerce within the Fourth Industrial Revolution being simultaneously physical, cyber and cyber-physical in nature.
Jamaican e-commerce at a glance
Let's take a quick look at the Jamaican e-commerce market. According to Statista the Jamaican e-commerce market:
- Revenues are projected to reach US$189m in 2020.
- The compound annual growth rate of revenues between 2020–2024 is expected to be 10.6%,
- The resulting growth is expected to result in a projected market volume of US$282m by 2024.
- The market’s largest segment is Electronics & Media with a projected market volume of US$44m in 2020.
- The number of users is projected to be 1.1m by 2024.
The United Nations Conference on Trade and Development (UNCTAD) developed initiative eTrade for all provides some useful data on the ever-expanding Jamaican eCommerce ecosystem.
Launched in 2016 eTrade for all is a global initiative that helps developing countries engage in and benefit from e-commerce.
Mailpac
Mailpac Group the e-commerce and logistics company have eleven (11) locations islandwide and offers the retail eCommerce enabling service of a US shipping address. This is a critical service in the Jamaican eCommerce marketplace as to date there is no direct door-to-door delivery of international e-commerce companies like Amazon or Alibaba in Jamaica.
The company was has been one to watch. I mentioned them in The Top 20 Business Trends to look for in Jamaica in 2020 — #20. Logistics opening new possibilities — as a key player in the expanding opportunities in the logistics space, specifically eCommerce. This directly related to their record-breaking Initial Public Offering (IPO) on Jamaica’s Junior Stock Exchange which raised $495 million in December 2019. The IPO funded its growth and expansion in response to the growing e-commerce market in Jamaica.
With Covid-19 with its social distancing and contactless commerce demand for Mailpac’s services have scored which according to Executive Chairman Khary Robinson their local business spiked over 500% in April and has been sustained by over 150% relative to pre-COVID volumes.
Jamaica to the world
One of the great things about Mailpac and other eCommerce platforms is that while they are by and large focused on the retail side of things and importation into Jamaica, all to this could be reversed for exportation.
All the contacts, connections and connectivity that are being forged pre-Covid and during Covid will not only serve Jamaican eCommerce companies well but will open up avenues for export growth. Additionally, investments in ‘connecting the dots’ and smoothing out challenges that have long plagued local transport logistics and warehousing, namely by leveraging technology has truly democratized the transformation of Jamaica into a logistics centred economy by giving everyone an opportunity to access global markets.
It has been reported by IBM in its US retail index that Covid-19 has accelerated the shift away from physical stores to digital shopping by approximately five years in the US.
What has it done for Jamaica?
I really can't answer that question as I don't have complete data but anecdotally based on the explosion of service providers and using Mailpac as a proxy I would say that we have accelerated our eCommerce development by at least ten (10) years. However, a word of caution, this does not mean we are now on the cutting edge of global eCommerce, far from it, but it does mean we are on a leapfrogging pathway.
Ecommerce and the Fourth Industrial Revolution
ECommece is the Fourth Industrial Revolution.
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, describes the Fourth Industrial Revolution as follows:
The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
If I had to boil the Fourth Industrial Revolution down to its basics I would say it consist of three things. And these are:
- Connectivity — this is about relationships. That is to say the relationships “between people-people, people-things, and things-things.”
- Flows —the movement of goods, services, people, data and money that characterize global commerce.
- Management of connectivity and flows — logistics, the glue of global trade: the process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. — The Council of Supply Chain Management Professionals
This is why I have maintained two things:
- Logistics is the key to Jamaica thriving in the Fourth Industrial Revolution.
- In many ways Jamaica’s Logistics Hub Initiative is a direct policy response to the Fourth Industrial Revolution.
Ecommerce as a driver of the Fourth Industrial Revolution in Jamaica
Ecommerce creates a clear pathway, and a low hanging one at that, for Jamaica to accelerate its development in the Fourth Industrial Revolution as a logistics centred economy.
Why do I say this?
E-commerce is asset light and cheap
E-commerce is asset light and cheap, and therefore a very good starting point to drive Industry 4.0 development in Brazil as well as globally. — Gabriel Lima CEO of ENEXT
E-commerce has supported the digitization
E-commerce has supported the digitization of enterprises and consumers and led to the implementation of efficient and effective digital supply chains. — Suoyu Zhang Vice President of Sinopec Europa GmbH
The union of e-commerce with Industry 4.0 technologies can address the logistical flow
The union of e-commerce with Industry 4.0 technologies can address the logistical flow of goods in Africa, promote financial technology solutions, enhance customer service and facilitate the growth of digital businesses. — Alastair Tempest, CEO at Ecommerce Forum Africa
This is why logistics matters Jamaica.
