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Cover Story
E-commerce
Logistics
Indian aviation ended up with just two For example, Apurva Mankad,
players dominating 90 percent of the founder and chief executive officer of
market. “I can see eight to ten players the transportation and logistics SaaS
in the current Indian B2C and B2B provider WebXpress, said, “While we
express logistics market. However, only are working largely in B2B supply chain
the three to four traditional players are and logistics over the last few years it
profitable, sustainable and doing well. has started coinciding with the overall
All other players are operating in losses e-commerce logistics quite a lot.”
and this will not continue for long.” “In the initial days, companies
It is important to see how this market like Ecom Express and Delhivery
will shape up after this consolidation, created dedicated supply chains for
which Khatri thinks is seven to 10 years e-commerce but today Delhivery
away, as it will determine the pricing is the largest B2B player in India,
and operation in the industry. doing everything. Supply chains are
Another acquisition that Khatri So companies are overlapping,” he added.
expecting is a logistics player by expected to prioritise Even though there are
Meesho. For instance, 80 percent profitability over growth specialisations for e-commerce, he
of the volume generated by Flipkart and have to be very noted that both service providers and
and Amazon, two of the top three cautious towards technology companies have to look at
e-commerce marketplaces in India, the entirety, not just at e-commerce as
goes to their captive logistics arms cash burn. a separate segment.
Ekart and Amazon Transportation Mankad also reported that the
Services (ATS) respectively. While Harshal Bhoi logistics companies that were overly
Meesho, which doesn't have a Xpressbees exposed to e-commerce business are
captive logistics arm, is the single suffering. “But almost every large
largest contributor for Indian third- company understood this is not the way
party logistics (3PL) companies to go and they all started backpedalling
and accounts for 35 percent of all and going towards the traditional
shipments delivered by 3PL players. business long back. Today, e-commerce
“Meesho’s per unit price is much logistics companies have a lot of B2B
lesser compared to Flipkart and non-e-commerce exposure, which has
Amazon and thus the pressure on gone up to 40 to 50 percent of their
logistics cost is also phenomenal. business, which used to be less than 10
Meesho is redesigning the percent three years ago,” he said.
packaging for example to me more “At the end of the day,
leaner and lighter. Can Meesho e-commerce in India is
acquire somebody?” he asked. less than 5 percent of the
He also noted trends like the shift total retail business. It is not
from end-to-end to vendor model 25 percent like China. We
by Flipkart and Amazon as they are were expecting that five
partnering with vendors only for the to become 10 percent. It's
last mile. Thus he noted that players going to take three more years to
like ElasticRun and Shadowfax are become 10 percent. So there is no
benefiting from it. He also said, macro-level impact but at a micro
“Every B2C player is now trying to level, there is the impact on the
do B2B. Ekart has launched their B2B companies that did not bet right,”
division, Delhivery already has its he added.
own with Spoton acquisition. Even amid the turmoil and
Ecom Express is coming up slowdown, the Indian e-commerce
with a small parcel vertical that market is growing and not going
can compete with DTDC.” into negative territory. And there
Even though there are sellers, are also new trends emerging in
logistics and tech companies the market which include speed,
that are dedicated towards cost and reverse logistics.
e-commerce,
the supply chains often overlap Need for speed
with other channels as well and the For instance, Zaiba Sarang, co-
difference is often visible in last mile founder of the e-commerce logistics
and warehousing. aggregator platform iThink Logistics,
8 July - August 2023 www.itln.in
