In the highly competitive home appliances market, customers are not only buying products; they are buying peace of mind and speed. HITACHI, a major player with a strong position in offline channels, faced significant challenges when scaling its presence across eCommerce marketplaces such as Shopee, Lazada, and TikTok Shop. The biggest challenge lay in Fulfillment operations for highly specific products: high-value, bulky items that are complex to manage due to a large number of SKUs.

1. Background and Introduction

About Hitachi: Hitachi is a leading technology corporation from Japan, currently operating across multiple sectors, including consumer electronics and home appliances such as air conditioners, refrigerators, kitchen appliances, and more. In Vietnam, through the Arçelik Hitachi Home Appliances joint venture, the brand has gone beyond traditional distribution channels and is making a strong transformation to capture the rapidly growing eCommerce wave. Hitachi has been actively strengthening its presence on strategic platforms such as Shopee, Lazada, and TikTok Shop to optimize the customer experience journey and increase market share.

Project scope: The project focuses on optimizing the fulfillment process for Hitachi’s eCommerce channel in Vietnam, covering the entire chain from inbound receiving, warehousing, order processing, and packaging to final delivery. The project is managed by the Logistics/Warehouse Management team in collaboration with UpBase as the implementation partner.

2. Current Situation: When the Outsourced Fulfillment Model Revealed Its Weaknesses

Initially, HITACHI chose to outsource fulfillment directly through marketplace logistics providers such as Shopee Express. However, as order volume grew rapidly, this model began to reveal major operational gaps:

• Operating costs increased in line with growth: At first, the model appeared cost-efficient. However, as order volume increased, fulfillment costs exceeded the safe threshold, reaching over 15% of revenue and significantly affecting the brand’s profit margin.
• Low SLA compliance: SLA performance dropped to an alarming level of 70%, while most eCommerce platforms require at least 95% of orders to be delivered on time. Failure to meet the strict delivery timelines set by Shopee and Lazada caused HITACHI to continuously receive negative reviews and face penalties from the platforms, ultimately damaging brand credibility.
• High error and return rates: Due to the lack of a consistent process for bulky goods, cases of incorrect product shipments, missing components, and damage during transportation increased. As a result, return and exchange rates rose significantly. This was especially costly for high-value electronics, as each returned order represented a considerable loss in shipping costs and potential product damage.
• Loss of inventory control: Manual warehouse and inventory management led to inventory discrepancies and false stockouts, causing orders to be delayed or canceled and directly impacting revenue. The lack of synchronization between the eCommerce system and warehouse operations also reduced the brand’s ability to forecast inventory effectively.

Overall, these issues created a critical operational challenge: how to build a professional fulfillment process that reduces costs and errors while increasing order-processing capacity and achieving optimal SLA compliance.

Under the pressure of multi-platform growth and increasingly strict operational requirements from eCommerce platforms, HITACHI shifted from a fragmented outsourcing model to partnering with UpBase to build a specialized fulfillment system capable of controlling the entire process.

2. UpBase’s Solution: Specialized Fulfillment for Challenging Product Categories

After identifying HITACHI’s operational challenges, UpBase restructured the fulfillment system with a focus on accuracy and end-to-end cost optimization:

• Professional handling of bulky goods: Dedicated storage and packing areas were set up for large-sized products, ensuring shock-resistant packaging standards while optimizing packaging materials to reduce costs for the brand.
• Standardized processes and training: Detailed workflows were established for each step, including inbound receiving, shelf placement, order preparation, quality packaging, and final inspection. Warehouse staff were trained based on standardized checklists, while a quality control (QC) team was added to strengthen supervision. Clear procedures for handling damages, exchanges, and returns were also implemented to minimize additional costs.
• Advanced warehouse management technology: UpBase used UpS, its multi-channel sales management platform, to digitize the entire product flow, from receiving and storage to order processing and delivery. Several steps, such as barcode scanning, order matching, and label printing, were automated to reduce errors.
• Digitized multi-channel operations: The system enables real-time data connectivity between the warehouse and eCommerce platforms, allowing orders to be processed immediately as they arise and ensuring compliance with the strictest SLA standards.

3. The Numbers That Speak for the Transformation

The partnership between HITACHI and UpBase delivered breakthrough results:

• 70% reduction in fulfillment costs: An impressive figure that directly improved the brand’s net profit.
• 100% SLA compliance: A significant increase from the previous 70%, helping HITACHI regain its “Preferred Shop/Mall” status and improve its ranking on the platforms.
• 0% packaging errors: Incorrect shipments were completely eliminated, helping save hundreds of millions of VND in return-handling costs each month.
• 100% inventory accuracy: Each product unit was strictly managed by serial number.
• 100% of orders processed within the same day: Ensuring maximum product turnover speed.

4. Strategic Perspective from UpBase

For the home appliances category, Fulfillment is not merely a logistics function; it is one of the key factors that determine a brand’s profit margin and reputation on eCommerce platforms. End-to-End operational control, from order processing and inventory management to specialized packaging, enables brands to eliminate significant hidden costs caused by errors and delays. When operations reach a level of excellence, brands can not only optimize resources but also build a sustainable competitive advantage through a superior customer experience.

Brand characteristics suitable for this solution:

• Product categories: Electronics, home appliances, and smart devices. These are high-value products that are prone to damage, bulky in size, and usually do not require a very large stock volume at the same time.
• Business model: Brands with a strong offline presence that are growing rapidly across multiple eCommerce platforms such as Shopee, Lazada, and TikTok Shop. Their order volume is increasing quickly and exceeding the capacity of their current in-house operations.

• Pain points to solve:
  
  • Fulfillment costs increase in line with revenue growth, while profit margins become narrower.
  • Brands are frequently penalized or have their store scores deducted by platforms due to SLA violations, especially late delivery.
  • Return and exchange rates are high due to packaging errors or damage during transportation.
  • Inventory is still managed manually, with a lack of real-time data synchronization across platforms.
    

UpBase’s solution focuses on warehouse operational excellence combined with a modern technology-driven management system to ensure that every order meets SLA standards. The ultimate goal is to protect cash flow and maximize profitability for brands by reducing operational waste. Contact UpBase today for a consultation!