CHAPTER ONE

GENERAL INTRODUCTION

1.2 Background to the Study

The advent of the digital economy has revolutionized global commerce, with e-commerce emerging as one of the most transformative forces in supply chain management. Over the past decade, the global e-commerce market has experienced exponential growth, fueled by increasing internet access, mobile technology, and digital payment systems. (Kawa and Maryniak 2019), the continuous growth of online shopping has led to major structural changes in distribution systems, with logistics providers facing rising pressure to adapt to the dynamic requirements of e-commerce consumers. The rise in e-commerce has dramatically increased the volume and frequency of deliveries, especially in urban and suburban regions. This shift has strained traditional delivery infrastructures and has led to significant challenges related to speed, cost, and environmental impact. (Rodrigue 2020)

In the developed world, the digital economy has evolved rapidly, with e-commerce emerging as a central driver of consumer activity and business operations. Countries with advanced digital infrastructure, such as the United States and Germany, have witnessed a profound transformation in retail and logistics systems due to the rising popularity of online shopping. According to the Organization for Economic Co-operation and Development (OECD, 2022), e-commerce in OECD member countries grew by over 20% annually during the COVID-19 pandemic, creating a significant surge in parcel deliveries and pressuring logistics systems to adapt swiftly with the growth of last-mile delivery the final leg of the logistics chain responsible for delivering goods to end consumers. In developed countries, last-mile delivery has become increasingly complex and costly, accounting for up to 53% of total shipping expenses (McKinsey & Company, 2021). In the United States for example, e-commerce giants like Amazon and Walmart have redefined last-mile delivery through massive investments in automated fulfillment centers, real-time tracking systems, and proprietary delivery fleets (Smith, 2021). Amazon, for example, has developed a vertically integrated logistics network to handle its deliveries independently, aiming to reduce dependency on third-party carriers like UPS and FedEx. While this has improved speed and control, it has also created significant concerns related to urban congestion, carbon emissions, and labor rights in the gig economy (Nguyen et al., 2020).

Similarly, Germany, one of Europe’s leading e-commerce markets, has experienced a sharp increase in parcel volumes driven by digitalization and shifting consumer preferences. German logistics companies such as DHL and Hermes have responded by adopting smart lockers, electric delivery vehicles, and routing optimization algorithms to improve sustainability and efficiency (Beckers, et al 2021). However, urban congestion, labor shortages, and rising delivery costs remain key concerns, particularly in densely populated cities like Berlin and Munich.

In many developing countries, e-commerce and last-mile delivery has become increasingly accessible but characterized by inefficiencies caused by poor infrastructure, unstructured addressing systems, high urban density, and limited logistics technology (Mangiaracina et al., 2019). The rapid expansion of online shopping, especially since the COVID-19 pandemic, has intensified these challenges, placing additional strain on urban logistics and transportation networks (Dablanc et al., 2021). For instance, in India, a major emerging e-commerce market, platforms such as Flipkart and Amazon have experienced exponential growth. However, last-mile delivery remains a significant bottleneck, particularly in semi-urban and rural areas where road infrastructure is underdeveloped and addresses are often non-standardized (Srinivas & Marathe, 2020). Similarly, in Brazil, e-commerce has surged in recent years, driven by increased smartphone usage and greater consumer trust in digital transactions. The country’s vast geographical size and socio-economic diversity, however, pose major last-mile delivery challenges. According to Filho et al. (2022), logistics companies in Brazil often face long delivery times, especially when serving customers in the Amazon region and smaller towns. Traffic congestion in megacities like São Paulo and Rio de Janeiro further compounds the problem, while high fuel costs and poor road conditions increase delivery expenses.

The growth of e-commerce across North African have also experienced notable digital growth driven by increasing internet access, mobile penetration, urbanization, and supportive government policies (UNCTAD, 2021). In Egypt, which hosts one of the continent’s largest e-commerce markets, online shopping has surged due to platforms such as Jumia, Amazon Egypt (formerly Souq), and Noon. However, this rapid growth has revealed deep logistical weaknesses, especially in the last-mile delivery process. Factors such as traffic congestion in cities like Cairo, informal address systems, and limited delivery access in rural areas have all hampered efficient distribution (OECD, 2020). Additionally, Egypt has a high percentage of cash-on-delivery (COD) transactions, which further complicates delivery logistics by increasing the risk of failed deliveries and returns (Rakha et al., 2022). Similarly, Morocco has witnessed a growing shift toward digital commerce, largely supported by rising digital literacy, mobile banking, and national strategies like “Digital Morocco 2020.” Despite this progress, e-commerce companies continue to struggle with the logistics of reaching customers in remote areas and navigating poorly developed postal systems. A significant number of Moroccan consumers still prefer cash payments, which creates logistical inefficiencies and financial risks for last-mile service providers (Tounsi & Boughzala, 2022). Moreover, high delivery costs and the lack of real-time tracking systems affect both service quality and customer satisfaction.

In the Sub–Saharan Africa, offering new avenues for trade, employment, and consumer access. With increasing internet penetration, mobile phone usage, and digital payment adoption, online retail has gained significant traction across many countries in the region (UNCTAD, 2021). However, the accelerated growth of e-commerce has placed pressure on logistics systems—particularly the last-mile delivery phase, which involves transporting goods from a distribution center to the final consumer. This stage remains the most expensive, time-consuming, and operationally complex component of the e-commerce supply chain (World Bank, 2022). In Nigeria, the largest e-commerce market in Sub-Saharan Africa, platforms such as Jumia, Konga, and PayPorte have driven substantial online retail activity. Yet, the country’s logistics infrastructure has struggled to keep pace with demand. Challenges such as poor road conditions, informal addressing systems, and high traffic congestion in urban centers like Lagos significantly affect delivery timelines and costs (Akinbami & Salami, 2020). Moreover, the prevalence of cash-on-delivery (COD) transactions poses financial risks for retailers and leads to a high rate of returns, complicating last-mile delivery operations further (Badejo & Solaja, 2022).

In Cameroon, platforms like Afrimarket have been at the forefront of promoting online retail. The government has also shown commitment through its Digital Economy Strategy 2020, which aims to strengthen the country’s ICT infrastructure and digital services. Nonetheless, challenges continue to hinder the effectiveness and reliability of last-mile delivery (Nkengafac et al., 2021). These issues are especially pronounced in semi-urban and rural areas, where logistics service providers struggle to reach customers efficiently. furthermore, , many consumers in Cameroon still prefer cash-on-delivery (COD) payment methods, which increase the risk of non-payment or product returns, further straining last-mile logistics (Mouafo & Nguimeya, 2023).

The rise of e-commerce in Cameroon has significantly transformed the retail landscape, with companies like GLOTELHO playing a central role in shaping consumer shopping habits. GLOTELHO, a prominent Cameroonian e-commerce platform, offers a wide range of products including electronics, household items, office equipment, and mobile phones. As consumer preference shifts from traditional shopping to online platforms, the demand for fast, reliable, and affordable last-mile delivery services has increased considerably (Mouafo & Nguimeya, 2023).

At GLOTELHO, the rapid increase in online orders has put pressure on its delivery operations. The company must balance growing customer expectations for faster delivery with infrastructural limitations and logistical costs. For example, deliveries within major cities such as Douala and Yaoundé are often delayed by traffic and inaccurate customer location data. In addition, delivering to remote areas is costly and time-consuming due to underdeveloped transport infrastructure (Tchindjang & Biloa, 2022). These factors increase the risk of failed deliveries, returned items, and increased operating expenses. Last-mile delivery, the final leg of the supply chain that brings goods from a distribution center to the customer’s doorstep, is one of the most critical aspects of e-commerce. It has a direct impact on customer satisfaction, delivery costs, and operational efficiency (Lim et al., 2018). Managing last-mile logistics poses unique challenges due to poor road networks, informal addressing systems, traffic congestion, and customer payment behavior—particularly the widespread reliance on cash-on-delivery (COD) options (Nkengafac et al., 2021).

1.2 Problem Statement

The emergence and rapid growth of e-commerce in Cameroon have transformed the retail landscape, offering consumers increased convenience and a broader range of product choices. GLOTELHO have been at the forefront of this digital revolution, providing an online marketplace for electronics, office equipment, and household items. However, as online shopping becomes more popular, the pressure on logistics systems especially last-mile delivery has intensified. Last-mile delivery, which involves transporting goods from a distribution hub to the final consumer, has become one of the most complex and costly segments of the supply chain, particularly in urban settings like Douala, Bafoussam and Yaoundé where Glotelho operates.

A primary challenge facing GLOTELHO’S last-mile delivery operations is the poor transport infrastructure and urban congestion in major cities. Roads are often in poor condition, and high traffic volumes slow down delivery times. These infrastructural limitations affect route planning, increase fuel consumption, and lead to delivery delays. Additionally, unreliable or non-standardized street addressing systems make it difficult for delivery agents to locate customer addresses efficiently, resulting in failed delivery attempts and customer dissatisfaction.

Another major problem is the growing operational strain due to high delivery volumes. As more customers turn to online shopping, GLOTELHO faces an overwhelming number of orders to fulfill daily. The company’s logistics resources, including vehicles and manpower, are often stretched beyond capacity. The widespread use of cash-on-delivery (COD) complicates operations further, as it increases the risk of non-payment, theft, and order returns. This payment method also lengthens the delivery process, as agents must wait to collect cash and verify transactions before completing deliveries.

Furthermore, GLOTELHO’S fragmented delivery system, which relies on both in-house logistics and third-party delivery services, has created inconsistencies in performance, accountability, and customer experience. The lack of integrated digital systems for real-time tracking, performance monitoring, and route optimization has further hindered the company’s ability to manage its last-mile delivery operations effectively. These issues not only undermine service reliability but also inflate operational costs, making last-mile delivery one of the most pressing logistical challenges in GLOTELHO’S e-commerce business.

1.3. Research question

1.3.1 Main research question

What are the effects of e-commerce growth on last-mile delivery operations at GLOTELHO?

1.3.2 Specific research questions

1 How do high order volumes and payment methods influence delivery speed and customer satisfaction at GLOTELHO?

2 what are the challenges of GLOTELHO’S logistics systems with third-party logistics provider’s coordination impact the y effectiveness of last-mile delivery?

3. What measures has GLOTELHO implemented within its logistics system to manage the challenges associated with third-party logistics providers in last-mile delivery operations?

1.4 Research objective

1.4.1 Main research objective

To fine out the effects of e-commerce growth on last-mile delivery operations at GLOTELHO

• Specific research objectives

1. To examine the influence of high order volumes and payment methods on delivery speed and customer satisfaction at GLOTELHO.
2. To identify the coordination challenges between GLOTELHO’S logistics system and third-party logistics providers that affects the effectiveness of last-mile delivery.
3. To assess the measures implemented by GLOTELHO to address challenges related to third-party logistics providers in last-mile delivery operations.