Breaking Borders: Fulfillment & COD as Game-Changers – Vichren Bisset & Michal Jedlicka, euShipments

This talk provides insights into the e-commerce logistics landscape in Eastern Europe, focusing on the speaker's company, EU Shipments, which has established itself as a leader in the region. The speaker discusses the rapid growth of the company since its founding in 2012, highlighting its expansion into multiple countries and its acquisition of leading fulfillment operators. Key topics include the importance of cash on delivery (COD) as a preferred payment method in Eastern Europe, the challenges and strategies of cross-border delivery, and the innovative approaches to fulfillment and returns management. Additionally, the talk emphasizes the benefits of using an integrated logistics solution to enhance operational efficiencies and improve delivery experiences for e-commerce businesses in the region.

Hi everybody. Thank you for being here today. Thank you for the uh host for the nice introduction. Uh we are going to present basically our company which is uh.com. Talk a about what we're doing but most of all give some advice and insights about the market and the industry of e-commerce here in Eastern Europe with all the specifics such as you know localization, COD and so on.

Uh so this is me. We already got presented. Uh so I'm not going to go into too much details. Uh more than seven years in the company. Uh I joined the company when we were like 10 people. Currently we're more than 300 people in five countries. So it's been quite an exciting growth period. Mh. Thank you V. Good afternoon everyone. Happy B to here. Uh my name

is Mik Lichka and I'm as head of career network responsible for our last mile career network providers uh and the strategic partners which are helping us to deliver the goods to our customers on time. [Music] So a little bit about your shipments I can kind of summarize the slide in one word. We are the number one e-commerce logistics company in Eastern Europe. That is the summary. We

have been awarded by a lot of know industry media and organizations web search award. So uh this is of course thank to all our e-commerce clients who trust us and work with us and give us the feedback to become better and better every day. Uh a square a quick snapshot of the history of the company. Founded in 2012, our first business was doing crossber deliveries between Bulgaria

and Romania. uh we used to be very much focused on Romania and still Romania is one of the biggest markets of the group but uh afterwards we started again replying to our clients needs first we opened the first fulfillment operation right on the border between Bulgarian Romania and the city of Ruse then we started expanding the delivery methods going to Hungary Greece Czech Slovakia Poland and so

on so uh this led to the gradual point when we decided to rebrand the company to eh shipments.com And currently this is the brand under which the whole group operates. We expanded in the last two years by acquiring some of the leading fulfillment operators in Eastern Europe. We invested in Romania where we bought uh helpship who is the currently one of the leading fulfillment operators. Uh in

Slovakia Swiss Point Data joined the group and in Croatia the company is called Pick and Pack. All of these companies now constitute one single um one single brand, one single operation basically doing the best possible logistic services for e-commerce in Okay, it's not very easy to change the slides. So, uh this is a snapshot of the current network. And these light blue dots here you can see

the own fulfillment and cross docking warehouses of EU shipments. These are basically our own companies, our own teams, our own operations. Uh apart from these uh we do have partnerships mostly in Western Europe which is out of our core markets where we're working with uh leading local fulfillment operators and our clients can use their facilities when they need to sell in these western markets their products. uh

apart from the fulfillment centers we're working in partnership with uh it's actually close to 100 nowadays I think couer companies that's actually what is responsible for managing all these local career companies um and in total we are shipping with more than 800 delivery methods because a single couer company has different ways in which they can deliver the parcel so we have home delivery out of home lockers

parcel shops poster service air express service and so on so It's a very big portfolio of delivery methods. Apart from that, the cash and delivery is a very uh important point of the business in Eastern Europe because it's a preferred or at least a popular payment method in most of these countries. And all of this is accessible through one single contract and one single API integration which

makes life very much easier for the eops. Okay, maybe let's uh sorry, this is the the snap the snapshot uh this is the snapshot of the company. Uh maybe I can just share one number that isn't here on the slide, but last year we delivered almost 10 million B2C online orders uh from a few thousand ehops from the region. Now I'll give the word to Yumi to

give us a little bit knowledge about the market and the countries. As a leader in the central and east European market and the provider who can help with your crossber selling and delivering your products, we actually prepared some uh numbers which we would like uh to highlight it. the numbers speaks for themselves and the most important is and come from this meeting to know that actually the

potential of it's a big uh as you can see the penetration the opportunities which uh central European market offers it's visible especially here if you compare uh the comparison of the internet users and e-commerce shoppers uh which are in those days uh available we can u offer uh more options to help you to grow your business. So uh basically what we do in terms of separate services

I already talked about the fulfillment available in multiple locations the crossber delivery which goes with or without fulfillment. So actually we're not obliging the ehops to use fulfillment because in some cases this is not the best solution for them. So actually what we can do is give them the technology to generate all the shipment labels for for all of these shipping methods and carriers and then our

company and our uh drivers are doing the first mile collection from the address of the e shop from their own warehouse basically or there's an alternative uh service where again we give them the technology they generate the labels and then they visit our warehouse uh with their own transport to inject to us the ready packed and ready label shipments and this is a very common service that

we are uh providing to merchants from more more remote geographies. So, Western Europe, USA, China, Turkey, this is kind of the standard setup. And a very significant part of e-commerce, which sometimes goes a bit um isn't such a focus before you start feeling the pain and the financial losses, the return management, which is becoming more and more and more crucial to having the best delivery experience and

shopping experience for your clients. So, specifically for the fulfillment, we already showed you the map. We have a lot of warehouses, our own and partner warehouses. Uh having in mind that all the operations is managed totally by our own in-house software. So we not rely on any uh external software company, software as a service or whatever. It's developed by us internally. And uh the main benefit of

having fulfillment is actually you can keep your stock right next to your clients because the stock has to be next to the clients not next to the ehop. So fulfillment is the best way to achieve next day delivery. at the cost of auto domestic delivery which is very very cheap. It is pretty much the only way and then having these fulfillment warehouses uh allows you to provide

local return addresses uh for your for your customers. Then going to the crossber delivery mi I'll pass this to you as everyone has in the mind also the map we were sharing with you where we operate the most important for us it's also to offer you the opportunity with the crossber selling and shipping. So there has many advantage which we can do for you. Not only to

offer you the scale of uh the injection points uh or our facilities but also to give you uh wild scale of the delivery methods which are home delivery, out of home delivery with the uh offices, parcel lockers and uh also pose locations. Everything is tracked with our uh uh advanced tracking system where you can uh monitor your shipments uh immediately when the shipment leaves uh our fulfillment

center or injection point up to the final last mile delivery and uh also allowed us uh to use our capacity in those fulfillment centers. Yeah, injection points uh we are offering for those fulu uh for those clients there actually operates their own fulfillment centers. So we can help them with the uh line holes injection to our injection points and then help them with the uh food distribution

which I mentioned before. Returns management as I said it's becoming very very important especially for some industries like uh fashion shoes we can have up to 20 30% returns it's it's quite common uh so having a it's important for two reasons first of all if your clients have a shitty return experience they will not order from you again right they want a easy free return if possible

uh labelless they want the couer to visit them take the parcel and take it back to you uh but furthermore it's very important for the merchant because the cost of returning a shipment usually is much higher than the cost of shipping it out in in the first place. So uh not having the optimum return solution makes you uncompetitive in a cost perspective. So what we have developed

in the past we restarted this five six years ago is having different local return solutions for every country in Eastern Europe where we are focused. Uh so in some countries the most popular solution is to send the courier to pick it up from the guy's home. And some to give him a code. He goes to the locker, prints the code, puts it in and that's it. Some

countries they want a label and they want to deal with the label by themsel. So every country is very different. The people are different and what allows us really to reach them in the best possible way is the local teams we have everywhere because apart from the operations of EU shipments all these countries where we are present we're having uh sales teams uh we having founders who

are coming from uh e-commerce backgrounds we're having customer support teams we're having call centers in some cases so this allows us really to understand very well the the recipients the clients not just to be an operational uh part of the supply chain And uh here the bottom point is quite interesting. What we developed uh recently for some of our clients is the possibility through the EU shipment

technology platform to refund their clients in the local currency because managing six currencies in Europe. So Euro plus five more currencies uh makes it very complicated to do the refunds to all of these clients when they want to return something. So this is another value added service that we developed just because our clients have asked about it. Now I think that the the name of our presentation

is such that we talk about COOD as like a way to enter Eastern Europe and a gateway to Eastern Europe. We believe this is the case because 5 years ago everybody thought COD would disappear. COD is cash and delivery, right? So everybody thought it would disappear because it is you know it is cash payment. It is not digital. It is kind of old old-fashioned. Uh but now

because almost all of the couriers and all the puddles and all the lockers have post terminals. So now it's not anymore cash and delivery. It is now card on delivery. And this is obviously it looks to be very very efficient for the customers because they're choosing it more. And on a market level and also uh let's say on our internal statistics level we're seeing increase of the

percentage of cash delivery instead of decrease. So it is actually the easiest way to enter a new market because setting up a payment processor on your checkout takes time and it's more restrictive. It's sometimes even even more expensive. Uh it easily increases your conversion rate because in Eastern Europe, especially in the Balkan part, people do not trust you if you're not a very very big brand or

a big marketplace. So they want to see the package physically and then give the cash or swipe the card to the driver's post terminal. And at the same time uh if you have the right partner with the right software and kind of financial setup you can have very fast daily cash flows in different currencies uh which doesn't make sud so difficult as it would seem. So this

is basically your best way to enter 17 markets in the EU. Of course it shouldn't be the only payment method because some countries cood is just a minority let's say share of the transactions. uh but even places like Spain, Italy, the Baltics, uh Poland, this is still existing and we have a solution for it. uh then COD removed the need for a bank account. You do not

have to have a bank account in every country. You can just use a fintech solution as long as your partner is integrated with such and uh at the same time uh we are investing in such integrations. So all of these payment uh sorry fintech solutions and many many more actually are fully integrated into our platform. So you can have an account there and receive the coods there

in your own um fintech account. Okay. So basically what we want to do very quickly because we're almost running out of time. But to give you an idea of how it works and why it works this way, we're going to give you a few case studies. Uh I'm not giving the brand names because it's too confidential. But uh number one what we have here one of the

biggest UK uh online retailers with a huge huge huge revenue uh EU shipments actually does their logistics solution for a large part of Eastern Europe. So the company is having its own fulfillment in Poland. We are having a dedicated line capacity provided by us. So every day the EU shipments, vans or trucks are visiting Poland, going to this huge merchants warehouse, collecting and then we are going

down to our facilities in Slovakia or uh Romania, Bulgaria, Croatia and so on processing the parcels and injecting them to the last miles. And why is this set up in such a way? Because through one single API and one single contract, this huge merchant has access to dozens of last miles and dozens of shipping methods. So it's much much much easier for them to work this way

and to be able to list on the checkout these different options for their clients to choose because the best checkout the competitive checkout the high conversion checkout is the one that has different couriers it has a choice it has home it has out of home then your clients are much happier to order from you a second case study it's a cosmetic this time it's a premium manufacturer

of premium so it's quite expensive cosmetics uh again quite success uccessful company the they started the business just with a few countries Bulgaria, Romania and Greece I think it was but nowadays uh 8 years later they are selling in the whole world mainly Europe and uh for this uh company we are also doing the B2B part of the business uh this means that apart from the online

orders which we are delivering to their end customers we're also preparing and delivering the products to their uh resellers toarmacies to Amazon warehouses is for the Amazon sales uh and so on. So this is a place where we can also help and at the same time again they're super competitive because they have two three four five cers for one country in some cases on the checkout. So

that makes them very very sexy in front of their And the last case study is uh a company which only sales through affiliate channels. So they're buying traffic through various affiliate networks or directly for some from some affiliates in I think mostly Eastern Europe and Italy and uh at the same time this is an example where you can use fulfillment in for some orders and your own

warehouse for some other orders. Why does this work? Because uh they have a small part of their products where they're customizing them. So before they they they send them they have to do something custom for each and every customer. This is not something that you shipments can really be useful for. So in this case they're using fulfillment for 90% of their orders and 10% of their orders

EU shipment is collecting the ready packed parcels from their warehouse. So it's a hybrid model with again through one single API and one single partner. They don't have to worry about how it works. Uh and they're also a company which benefits from daily COD payments because having very fast cash flow they can have uh they can order more and more and more stock in smaller quantities every

day which in their business model is a big uh advantage. I just forgot one thing. Sorry I want to mention it. They have a very huge difference of small, medium and large and bulky products and for each product category we have chosen calculated, analyzed and chosen the best couer for these type of products because not one courier company cannot handle everything you know that's that's quite important.

Uh now Mik I give you the word to say something. Actually based on those case studies we actually try to uh compare the advantage and advantage uh what we can what can the in-house fulfillment or outsource fulfillment offer to you. Of course, if you're not the biggest player in the market and you you able to absorb all the cost regarding the our own uh fulfillment centers, we

are offering uh the outsource fulfillment based on your needs which are really variable. We are able to offer you large of scale of capu uh capacity uh help you help you with uh the deliveries with the testing also opening the new markets which sometimes can be really tricky when you operate on your own. There will be the second one and uh there you can see the discage

between the classic cross border career and uh integrators which can help you also not be a Leon on just one provider in the market but you can use the scale of the uh best players in the market for the last delivery uh which offers you little bit freedom and also leverage the risk uh which always goes with uh dedicated uh countries. is uh in different careers in

dedicated countries because in each country uh the carriers are uh different and uh the importance of each of them plays different role. For example in Poland definitely if you go with the impost and parcel lockers uh you will beat the market more than for example with the home delivery and ups and down. If you go to the Italy, there is more uh important still the home delivery

which is uh the key role for uh the service your potential client is choosing. So kind of to wrap up the whole thing uh think about the fulfillment think about the crossber deliveries make the difference between just using one carrier because one carrier is a big risk and it's not helping your sales even on the on the contrary actually it's uh you're losing sales if you just

use one one courier and uh then think about uh how to actually choose the right partner because uh the size the stability the portfolio of clients the portfolio of delivery methods is very very important. If you go on to Google and write fulfillment Bulgaria or fulfillment Romania, you get 100 results. But most of them are just websites, right? It's nothing else. So they have this in mind.

Maybe we have time for one question or two questions if somebody wants to ask. If not, we'll be at our booth. You can come to meet us to talk to us. If we cannot help you, at least we can advise you something based on our uh experience and our partners.