Right from Flipkart, Snapdeal and Amazon, all of them consider logistics & delivery as the key area that will drive their future growth. This is why ecommerce-focused logistics companies such as GoJavas, Ecom Express and Delhivery are under immense pressure.
Pressure of keeping pace with top online players, overcoming transportation barriers, surviving intense competition and building technology to ensure speedy delivery is testing these logistics companies’ mettle.
Ecommerce leaders want to ensure their company’s grow by adding more and more pin codes to their serviceable areas. Efficient logistics is the only way to reach deep pockets of India.
Various roadblocks prevent firms from increasing their reach. The most obvious factors are lack of good infrastructure and legal restrictions. There are other issues too that ecommerce-focused logistics companies face such as problems in shipping, high attrition rate, and inconsistent demand.
Opening up warehouses and delivery centres in hard-to-reach places is the next feasible solution adopted by delivery partners.
“We’re looking to begin (covering) 500 towns and cities by end-December, and 1,000 by the end of the next fiscal year (March 2017). We have 17 hubs and about 700 delivery centres, but are in the process of adding centres in 100-odd cities in Bihar, Odisha and Jharkhand between now and April,” revealed TA Krishnan, Co-founder of Ecom Express.
Automation is the key to strengthen ecommerce logistics and delivery function. Technology often comes to the rescue when logistics gets stuck due to various roadblocks.
Vijay Ghadge, GoJavas’ CEO said, “Technology will help us to handle scale. We are creating software that will help us handle updates on the field, swipe on delivery and customer interaction, among others. Human intervention happens just once in 70% of our orders today. We’re looking to automate everything.”
Competition is from two sides. On one side, there are heavily funded hyper-local delivery startups like Parcelled and Opinio. On the other side there are companies owned by etailers such as Flipkart’s Ekart or Snapdeal’s majority stake in GoJavas.
Companies like Ecom Express aren’t worried as they believe they can handle scale and set-up independent sustainable businesses unlike few startups and etailer backed companies.
Krishnan raised a valid point, “When the funding dies up, how long will (ecommerce companies) sustain (in-house logistics units)? Will they have that much traction on their own (to run these units)?”
Bottom line is ecommerce-focused logistics companies will have to roll their sleeves up and get ready to work extra hard in order to meet the fast-growing online retail industry’s demand.
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