Understanding the fragmented demand for transportation – Small traditional retailers in emerging markets. (December 2019)

• Record Type: Journal Article
• Authors: Boulaksil, Youssef; Fransoo, Jan C.; Blanco, Edgar E.; Koubida, Sallem
• Is Part Of: Transportation research. Volume 130(2019)
• Page Start: 65
• Page End: 81
• Publication Date: 2019-12
• Subjects: Goods transportation -- Nanostores -- Big cities -- Emerging markets -- Empirical study -- Morocco -- Supply chain management; Transportation -- Research -- Periodicals; 388.011
• DOI: 10.1016/j.tra.2019.09.003
• Languages: English
• ISSNs: 0965-8564

Abstract

Abstract: The demand for goods transportation in emerging markets is fragmented, mainly due to the unstructured and informal ordering behavior of the many small, traditional retailers in these markets. In this paper, we study such small traditional retailers located in the neighborhoods of big cities in emerging markets. We call them nanostores. Although modern retailing has grown in the last two decades in these markets, the number of nanostores is still increasing and serving a substantial part of the daily demand for many basic products, such as bread, milk, and cooking oil. We thus conduct an empirical study to understand the business environment of these nanostores in emerging markets by collecting data from 333 nanostores, spread over eight large cities in Morocco. We analyze the data, conduct a cluster analysis, and describe their business environment with a focus on their order behavior, which typically triggers the transportation decisions upstream in the supply chain. We find that the order information from these retailers may not be the best information to rely on when making transportation decisions. Our study also provides several interesting insights that may help organize transportation toward these nanostores in a fundamentally different way. We also discuss a number of opportunities to improve the efficiency of the supply chains that serve them.