‘The trust problem’
While the ecommerce industry is booming in Nepal, it faces a massive trust problem. Any flourishing business needs trust between the market participants. Like most, business trust is missing in Nepal between the buyers and sellers. Explore how our AI-driven data science logistics service in Nepal optimizes supply chain efficiency and reduces operational costs.
Seller cannot trust an online buyer. An online seller does not receive payment upfront and rather must rely on Cash on delivery (COD). The seller must bear costs of processing and delivery without any financial commitment from the buyer. A typical online seller is totally at the mercy of the online buyer that they will make good on their promise to accept the item when delivered.
The buyer cannot trust an online seller. The buyer, on the other hand, also does not want to pay upfront as there is no system of refunds and warranties and hence, they may be provided with faulty products. There are many dodgy online sellers, and they often cheat with their fake products sold online and vanish.
Online businesses rely on trust, and this is a major problem. The genuine online sellers are suffering from high returns created by untrustworthy buyers and genuine online buyers are suffering from behaviours of untrustworthy sellers. This is hindering e-commerce from flourishing as fast as it could in Nepal.
At Nepal Can move – Nepal’s national courier, cargo, delivery, and logistics company, we searched for potential solutions and came up with three potential solutions. We have adopted the first two solutions and we look forward to providing the third solution in the future.
Rating solution
First solution is rating solution which we at Nepal Can move call E-commerce Customer Rating (ECR). Rating of an online buyers will help the online sellers check the trustworthiness and make appropriate selling decisions. At the time of writing, Nepal Can Move, one of Nepal’s largest courier companies, has delivered over 1.3 million packages all over Nepal. We can check any potential online buyer against that dataset and rate that online buyer. We provide each inquiry a non-identifiable data as:
- 1–5-star rating and potential success rate
- Total orders, completed and returned orders recorded in the system
- Last order placed and the expensive order placed
This meaningful information about the online buyer will give online sellers useful information to assess their trustworthiness and decide with confidence if they want to do business with them, charge a risk premium or offer any discount. Some of our vendors have been able to cut their return rates into half using our ECR Service.
Data Science & Artificial Intelligence solution
While 1.3 million package is a large dataset, it is not a complete solution for 30 million population of Nepal. We sought help from data science and artificial intelligence to cover the gap. We needed an AI algorithm to give us predictions about the possibilities of a particular order being delivered or being returned based on the existing data.
There are many scenarios where a particular order delivery results in failure, like:
- Customer fraud and behaviour where they placed order without genuine commitment
- Customer not satisfied after receiving the package as the vendor sent faulty product
- The customer is located far away, or someone has sent them the wrong address.
- The vendor sends an item to the wrong branch that cannot be delivered without returning
- Transit delays are causing a hold-up in delivering the package.
Additionally we designed our AI algorithm takes inputs like Vendor id, weight, branch id, destination branch id, order created date, COD charge, delivery charge, and customer id. Using these inputs, the algorithm predicts the probability of delivery of an order or failure of an order. The algorithm also gives information about the factors contributing to the delivery failure.
Trust agent solution
Similar problem overseas has been solved using intermediary trust agent. The arrangement can be that online buyer pays the trust agent rather than the online seller. The trust agent notifies the online seller that payment has been received but does not release the payment. The online seller then sends the goods with information that payment has been made. The online buyer receives the orders and then informs the trust agent via the delivery partner that orders have been received satisfactorily. Only at this point, the trust agent remits the payments to the online seller.
Moreover If the online buyer does not receive goods satisfactorily, the trust agent refunds the payment back to the online buyer. This arrangement will solve the trust problem in online buying and selling. Until now, there is not anyone in the market providing this solution in a meaningful way. In the future, Nepal Can Move expects to provide online trust agent services.
Conclusion
We face huge challenges as a delivery company in Nepal. However, we find solution that help online sellers sell more online. At the same time, we help online buyers buy with confidence. As Nepal’s one of the largest courier, delivery, and logistics company we continue to develop tools and technology that help e-commerce sector flourish in Nepal. Nepal Can Move prides itself in being the technology company in the logistics industry and has a team of talented developers who continuously use advanced data science and artificial intelligence to create robust solutions for the e-commerce, logistics and trade sector in Nepal.
About us
Nepal Can Move, your full-service courier & logistic partner, Fast. Secure. Reliable. You Can Count On us for Your Success and Growth. Experience service like never before. We have developed a state of art technology, a well-trained team, one of the largest network of branches and a comprehensive vehicle fleet to solve the logistics problems of Nepal.
Authors
Amit Timalsina–ML Engineer at Nepal Can Move – https://www.linkedin.com/in/amittimalsina/
Sudeep Acharya–CTO for Nepal Can Group entities – https://www.linkedin.com/in/sudeep-acharya-69374225/