Royale Internationale, a Hong Kong-headquartered global express delivery services company, has solved 7-Eleven's unique parcel inventory challenge using a combination of Amazon Web Services cloud services.
Founded in 1908, Royale International has diversified its service portfolio from traditional courier services to warehousing to specialized services, such as time-critical delivery, e-fulfilment and financial research distribution.
Coordinating Taobao shipments for 7-Eleven
About 1.5 years ago, Royale International partnered with convenient stores chain 7-Eleven to provide a delivery service called "Retail Distribution." Under the partnership, Royale International would exclusively deliver goods shipped by Taobao online stores from mainland China to 7-Eleven stores in Hong Kong for subsequent collecion by customers.
As part of the Retail Distribution service, 7-Eleven's software requirement for Royale International was to manage its courier parcel inventory, in terms of the number of parcels in-store.
Initially, Royale International did not have the needed IT infrastructure to support the Retail Distribution service.
"When the first Double 11 ("November 11") in 2015 came along, we faced a lot of challenges for the first time as we needed to handle all the parcels to be directed to 7-Eleven stores," said Steven Kwok, project manager, Royale International Group.
In Hong Kong, the 7-Eleven stores are generally small in size. Typically, a 7-Eleven store can store a minimum of 10 parcels, and 30 parcels at most. This posed a serious challenge on them as they are serviced as courier pick-up points for customers.
"In the two weeks that followed the Double 11 in 2015, we had to stack numerous parcels in our Royale International, because all the 7-Eleven stores did not have enough physical space to store all the parcels. It took us two weeks to process and dispatch all the parcels. In the intervening period, we received countless calls from customers inquiring where their parcels were," Kwok recalled.
"7-Eleven told us that the model was not working. Then we decided to use AWS to build out our whole new infrastructure [for the Retail Distribution service], to cater to the sudden spikes in traffic, resulting in a huge backlog of parcels in our warehouse."
Low entry cost
In 2015, Royale International built a whole new, cloud-based infrastructure on Amazon Web Services from scratch. It was a challenge to build a system to suit the 7-Eleven model, said Kwok, as it would need to provide a platform for Royale International to coordinate shipments with all parties: online retailers, Royale International’s warehouse, 7-Eleven stores, and Royale International's couriers.
"We selected AWS for its low entry cost, as we could pay for its services on a monthly basis," Kwok said. Royale International adopted EC2 to auto-scale its servers. "This helped us to fulfill all the web requests during major occasions, such as Double 11, December 12, Chinese New Year, and a various events on Taobao each month."
"We were also required to support new 7-Eleven merchants, without modifying the existing core systems," said Kwok. "That was why we also adopted Lambda (to build a serverless backend) and API Gateway to create different APIs for different customers."
To cater to the merchants' use of Excel to upload data, Royale International uses S3 (for massive data storage) with Lambda to create triggers. It has also built another EC2 for FTP and upload it to S3, then use Lambda to trigger a file, in turn put the file to DynamoDB to process diverse data file formats easily.
Improved inventory control
"It is our aim to build a mobile client in every single 7-Eleven store," Kwok said. The software that 7-Eleven presently uses to check out a customer's parcel from Taobao was developed by Royale International. And as the company expands its service from a courier company to a system integrator (for 7-Eleven), it aims to pick up the entire delivery service of 7-Eleven.
"At present, the mobile client with Amazon API Gateway will be used to feed the data of real-time check out of parcels back to the Retail Distribution system. This enables us to exercise real-time inventory control at each 7-Eleven store, as the system is able to indicate the current number of parcels in each store. This enables us to forecast the speed of parcel check-out at each 7-Eleven store," Kwok explained.
Royale International's Retail Distribution platform was initially connected to 50 7-Eleven Stores and it had been growing quickly. "We experienced a 300% growth in the first six month after we adopted AWS. We are now delivering goods to 370 7-Eleven Stores. At present, we deliver more than 1,000 packages a day. We have also expanded our business to return service," Kwok reported.
"AWS is easy to use. We were able to launch the project in just three months. It is also very secure. It makes sure all its connections with clients are SSL-compliant. This has helped Royale International to move to ISO9001 accreditation," Kwok commented.