Even major e-railers like Flipkart, Amazon and Snapdeal do not cater to distant towns and cities of states like Uttar Pradesh, Bihar, Jharkhand, Punjab, Madhya Pradesh, Himachal Pradesh and West Bengal. Unable to service demand in these high populated areas is a lost opportunity for e-tailers.
Although there is heavy demand from these areas mainly due to the increase in mobile penetration, e-commerce companies and service providers find it difficult to provide services due to the following reasons:
Research and data indicate that 50% of online sales, hence e-commerce growth, were from customers from cities apart from the top 8 cities in India. 30% of Myntra’s sales are from mobile shopper from tier 2 and 3 cities and towns.
Out of the major marketplaces, Snapdeal delivers products to customers through third-party logistics only, hence is dependent on the reach of their network. It accommodates sellers from around 200 locations, with delivery to more than 4,000 cities.Flipkart has its own logistics subsidiary ekart, hence decide on the serviceable areas on its own. But ekart’s delivery is limited to 200 cities, beyond which Flipkart also works with third-party logistic providers.
Some suburbs of top cities, like parts of Greater Noida and Faridabad in Delhi-NCR, also don’t come under serviceable areas as delivery to these are not cost-effective.
Slums in Dharavi and Antop Hill in Maharashtra give large volumes of orders, but finding right houses are impossible due to which delivery companies are not able to fulfil orders. Also, some people don’t know their pin codes or are not sure of the same which leads to problems in giving definite addresses.
Due to the potential in the North-East, Myntra built its own network to cater to customers from those areas. If you have the means, you can think of setting up a logistics network exclusively for such areas with extra measures to combat the difficulties.
Cash on Delivery is not an option given to some states due to local government taxes. If the volumes are significant, you can provide COD option by mentioning that local taxes would be applicable extra. To solve the issue of cost-effectiveness, you could apply the same tactic of adding the applicable cost. If customers are really eager and in the absence of other e-railers catering to the areas, they would probably not mind paying a little extra to get their desired products.
After dwindling with her family business, into travel and hospitality, for more than 3 years, Pooja Vishant found her true love in writing. Happy-go-lucky and cheerful, she loves pink; so pink is the way to go if you want to get into her good books. The Associate Editor keeps track of even a leaf that has moved in the ecommerce world!
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