Zalora explains cash-on-collection trial with 7-Eleven and its logistical headaches in Singapore

Logistics is a big part of fashion online retailer Zalora‘s business, which is why it’s so important to get it right. Unfortunately, logistics is still spotty in Southeast Asia — Singapore included — causing many e-commerce businesses to resort to cash-on-collection as a means of delivering the goods.

While common in Philippines and Indonesia, Zalora has launched their own cash-on-collection trial in Singapore involving 19 Seven-Eleven convenience stores. This is the first time the business has tried something like this in any of its markets.

Here’s how it works: Shoppers can either pick cash-on-collection or the option of paying online and having the item delivered to their house. If they pick the first choice, they can then select their preferred 7-Eleven store. Finally, shoppers will receive an SMS whenever the order is ready for collection upon payment.

According to a Zalora spokesperson, the initiative is ideal for working professionals who have difficulties predicting their schedules due to irregular work hours and unforeseen circumstances.

The company is also in the midst of building its own delivery fleet in order to own the entire customer experience.

This is seen as a necessity. While many logistics companies operate in Singapore, most have operational difficulties when it comes to handling higher volumes. They also lack customer centricity that involves providing friendly service, accuracy, reliability, and flexibility to shoppers.

So far, Zalora Singapore has found it challenging to identify a player that can deliver consistently on all these features.

Which brings us to Zalora’s recent USD 100M funding round: The money certainly gives the company more flexibility to build up its business. Outsourcing your business to an inadequate partner can be devastating for Zalora, since customers might be more likely to blame the fashion outfit rather than the logistics company.

In the event service providers are unable to meet the demands of Zalora’s huge volumes, at least it has the option of dictating its fate by building capabilities in-house.