Sometimes no matter how efficient the back-end systems may be, or how fast orders are processed, deliveries get delayed due to last mile issues. Be it due to slacking of logistics personnel or insufficient fulfillment centres, fact remains that deliveries are messed up adding up to unhappy customers.
Especially with growing demand of online shopping in smaller cities and towns, it is imperative for etailers to focus on smooth deliveries to customers from these areas as well. Flipkart has plans to open up pickup and collection centres in such areas which account for a population of 50,000 or more to accommodate business from them.
If reports are to be believed, the home-grown etailer will roll out these by April this year. 270 such fulfillment centres will be opened by March 2017. “So we can have a lot of people from tier-4 or tier-5 cities coming and collecting their stuff if we set up pickup centres,” said Sujeet Kumar, head of WS Retail and ekart Logistics.
Flipkart’s in-house retailer WS Retail is the largest vendor on the Flipkart platform. Ekart, the logistics and delivery arm, delivers products to almost 300 cities and towns in the country.
“You cannot develop a hub network for such areas. Pickup centres will work for such areas. We may start with 20 cities in the first half of the year. Scaling up is very fast. In a year and half I can open centres in 250 more cities if the response is good,” Kumar told ET.
This is how the model will be operated:
Smaller cities and towns account for 55% of online sales in the country, mainly due to increase in disposable incomes and non-availability of branded goods in these places. However, despite the multiplying demand, even ecommerce biggies like Flipkart and Amazon find it difficult to cater to them due to poor infrastructure.
According to experts, Flipkart’s latest strategy is on the lines of ecommerce companies operating in price-sensitive markets such as Germany, France and China. For example, local shops are designated as pickup centres while even tobacco shops become the point for returns.
“Collection points can indeed increase the reach of the company into less well-connected parts of India and, much more importantly, also help keep shipping costs low enough to keep online shopping competitive with offline stores,” said Karan Girotra, professor of technology and operations management at INSEAD.
Amazon India started similar operations last year when it tied up with local kirana shops, which are just around the corner in most neighbourhoods. Although it is a better strategy than Flipkart, considering it’s been tried and tested in many countries, it also means additional training to be given to people to monitor a network of shops.
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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