In a move that signals good news for the logistics sector, US-based private equity firm Warburg Pincus has invested in Indian logistics company Ecom Express. According to the latest report from ETRetail, Warburg Pincus has invested Rs. 850 crores in Ecom Express. The report says that Ecom plans to utilize the funds in widening its scope of delivery, upgrade its technology, and bettering its network reliability. The company intends to move its scope of operations to tier 3 and tier 4 cities and towns.
The report mentions Tiger Global’s recent investment in Delhivery. The global investment company has placed its bets on the Delhi-based Indian logistics company with an investment of Rs. 542.4 crores.
Ecom Express – the journey so far
Founded in late 2012, the company was started with an aim of servicing the electronic commerce industry in India. Starting off with a delivery location of 36 cities based in North India, the company claims to have a current footprint in about 210 cities, according to the article.
Ecom Express is the brainchild of founders T.A. Krishnan, who is the CEO, Sanjeev Saxena, K. Satyanarayana, and Manju Dhawan. All four founders are alumni of Blue Dart, a leading logistics firm.
Interestingly, a Google search for Ecom Express throws up a host of negative reviews and ratings from flustered customers talking about poor and delayed delivery, and poor customer service. The company’s Facebook page is also teeming with irate customers venting their irritation against the company’s shabby delivery system.
Sadly, there seems to be little or no response from Ecom in relation to these complaints and comments. Most people are talking about their experience with the never-ending wait for their consignments, a malfunctioning tracking system, rude delivery staff, and non-responsive customer service.
Logistics companies and the ecommerce sector
The logistics demand for the ecommerce industry is growing in leaps and bounds. The growth of online shopping spaces has a direct impact on the potential for logistics. With the ecommerce graph set to shoot up in the days to come, it is a very fertile ground for courier companies as well.
Over the years, companies like Blue Dart, GATI, FedEx, among others have been leveraging the opportunity by partnering with ecommerce sites like Amazon, eBay, and Snapdeal for their logistics needs. Other major players like Flipkart are taking care of this in-house with their own delivery service, E-Kart. A recent news article in Deccan Herald tells us how ecommerce companies are turning to the good old Post Office for its delivery requirements. The report speaks about Amazon tying up with the Karnataka Postal Circle for its delivery needs in Bangalore.
However, the battle for logistics companies is far from over. This report talks about the numerous problems they face while trying to keep up with the growing needs of the ecommerce industry. The problems that delivery boys face are also not simple. From lugging unhealthy amounts of baggage on their backs to sweating it out on the crowded roads, to stressful working hours, they don’t have it easy.
With more investors putting their money in the Indian logistics sector, online sellers can hope that logistics companies will fix the loose ends towards better service.