Cultivating 15+ years of experience in the logistics sector into his own logistics venture was a natural progression for Ajay Rao. Despite the increasing focus on express and effective ecommerce logistics, Ajay felt that:
There were very few organized players answering to the demand for improved logistics.
Although many companies were trying to solve last-mile delivery issues, there didn’t seem to be a high quality and technologically advanced warehousing and fulfilment solution for SMEs in India.
Aggregating the volumes of these SMEs would translate into a significant opportunity for an end-to-end fulfilment solution.
Thus was born Emiza, to address this gap and create a solid multi-channel fulfilment solution for SMEs. With operations in Delhi, Mumbai and Bengaluru, Emiza empowers SMEs to grow their business by using new age solutions to manage and distribute their inventory.
We decided to chat up with Ajay and gather his thoughts on logistics, fulfilment and more.
IOS: What is the role of warehousing in the online retail process?
Ajay: The business of online selling is buying and receiving products with ease from or to any location using mobile or web and in order to achieve this, intelligent supply chain and warehousing is the only enabler. It is a key determinant in meeting the service level agreement between the marketplace and the end customers (order to dispatch time), packaging quality, inventory accuracy and costs associated with order fulfilment.
What are the problems faced by logistics players? They receive a lot of flak for their many drawbacks and faults.
Ability to meet faster delivery time due to lack of proper supply chain, rail-road architecture and lack of traceability of the product in the entire supply chain from vendor to customer.
Cash on delivery- Many logistics companies lose a lot of money due to COD since they have to incur cost of logistics even if the end customer rejects the product.
Tough competition resulting in fewer profit margins
Widely distributed customer base
What are the challenges in the logistics industry now?
- Optimisation of resources, availability of skilled resources at the operator and mid-management levels
- General apathy towards use of technology to automate processes and reduce dependence on labour
What changes are required? Can only government do something about these?
Changes are required at every level. Sellers and brands need to be open to letting go of the fulfilment activity to adopt professional fulfilment solutions.
The implementation of GST will bring significant efficiencies in both warehousing and transportation. Warehousing will get clustered around consumption centres instead of warehouses in each state. Also, transportation would be faster as border controls would be easier. More than physical infrastructure, it’s the policy framework that needs fixing with faster roll out of key initiatives.
Why should a seller choose a professional fulfilment solution?
For a seller to be able to really scale his business online their backend needs to be reliable. A lot of technology, engineering, process management, vendor management and human resource management go into to creating a reliable, scalable and viable fulfilment solution. Eventually an in-house fulfilment solution becomes the bottleneck to growth. The seller needs a solution that can expand and contract seamlessly with his business volumes, allows the seller to focus on product management and “selling” and gives the seller predictability in costs per unit on a variable model instead of a fixed sunk cost.
Is Emiza different from a marketplace fulfilment solution?
Emiza’s multi-channel fulfilment solution will help sellers to manage and fulfill orders across 10+ channels (online) and offline (dealers and distributors) from a single source of inventory. We partner with customers to deliver measurable dollar benefits to their topline and bottom line. Their pain point of managing this complex process and meeting stringent SLAs is addressed above and beyond the tangible benefits. Not just ecommerce, we also serve retail businesses and B2B by allowing sellers to store inventory at a single location and optimize inventory across all channels.
How crucial is the growth of logistics for the expansion of ecommerce?
- Simply put, logistics enable ecommerce. Hence it makes more sense to say that due to the fast pace of growth of ecommerce, logistics industry also needs to keep up and provide high tech and efficient solutions to support this growth.
- Logistics space is growing at a CAGR of over 16 per cent over the last five years, despite the industry being highly fragmented with organized players being only 6 per cent. By 2020 e tailing will capture 20% of the market and for this ecommerce is playing a crucial role.
- Efficient logistics is the need of the hour to ensure faster delivery for next gen ecommerce and to save costs, which will also help to increase time spent on core business functions.