LG and Hyundai will launch a joint venture, Nextation, to provide eCommerce collection points.
Korea’s LG-Caltex Oil and Hyundai Oil Refinery will create a $3.2 million joint venture firm to be called Nextation, to develop a solution to the problem of failed home and business deliveries of merchandise and parcels. This problem not only increases B2C and B2B fulfillment costs, but is also one of the main causes of dissatisfaction that deters customers from purchasing goods online.
A solution is to develop collection points based on networks of established convenience stores, gas stations, public transport nodes, and other outlets where foot traffic is generally high, access is easy and opening times are convenient. Nextation is following this model, transforming the network of 11,000 domestic gas stations operated by LG-Caltex and Hyundai into logistics collection points. Similar ventures are already offered by m-box in the UK and Privpak in Norway.
eCommerce is currently most prevalent in the US, where eRetailers and online consumers have been trading for some years, and in Europe, where recent growth has been rapid. Asia’s role in the global consumer eCommerce trend has been more of a ‘sleeping giant’. Still, the continent has shown the highest levels of growth. Datamonitor figures show that while North America’s 94.8 million online consumers in 2000 represented a 69.6% growth over 1998, Europe’s growth rate over this two-year period was 168.8%, with 62.9 million shoppers, and Asia’s was 202.4%, based on 37.2 million online buyers in 2000. Datamonitor also estimates that Asia will have 204.5 million online consumers by 2005.
Asia’s weakness in the online consumer trade market in relation to the US and Europe is the result of less developed payment and logistical infrastructures, as well as lower average incomes in the region. Nextation’s operation, set for launch on March 15, directly addresses two of these issues by offering an alternative logistics infrastructure across Korea and deferred payment services. As solutions similar to Nextation’s are spread across Asia, the sizable eCommerce growth forecast in the continent will begin to materialize.
