Page 8 - ITLN July - Aug 2023 for Magzter

Cover Story
E-commerce
Logistics

that the overall growth has slowed down As e-commerce brands and their
but he is expecting 20 to 25 percent logistics service providers are shifting
average growth this year. “So companies focus to profitability from growth and
are expected to prioritise profitability cash burn, they also need to have a
over growth and have to be very cautious clear strategy to attain this.
towards cash burn. Three or four years “It requires a lot of cross-utilisation
back, it was more about volume but now and optimisation,” pointed out
it is about being profitable and reducing Himanshu Singhal, head of business
cash burn,” he said. development marketing and sales of
There are also industry leaders that CABT Logistics, an intra-city logistics
opined that it is the overvaluation that company for e-commerce. “Any new
is getting cut from the industry. For entrant in this supply chain industry
example, Yogesh Dhingra, MD and chief for the e-commerce industry has to
executive officer of Smartr Logistics, said, burn a lot of cash, but profitability can
“Over the last four years, there was so Investments are not be attained in a very short span of time
much focus on the unlisted stock. More as free-flowing as if the proper focus is paid on cross
money they used to burn, the higher the they were earlier and utilisation and optimisation of resources
valuation used to be. But now people have everybody realised that and deliveries,” he said.
understood that was not the right way of The current dip in volumes and
doing the valuations. Anything which was the value of money is growth will have a direct impact on
overvalued is getting cut.” higher than what they e-commerce brands and their logistics
However, there are also indications thought earlier. service providers. How many of them
that targeted investments are happening will survive this funding winter or how
in the e-commerce logistics segment. Dipanjan Banerjee will the turmoil shape this industry? Will
For instance, Deven Pabaru, chief Ecom Express there be consolidation in the market?
business officer of the e-commerce
mid-mile and fulfilment company Stellar is now going to see more bang for the Consolidations?
Value Chain Solutions opined that the buck. “So the focus now is to make For instance, Vikash Khatri, the founder
serious players are continuing to invest sure that the volume increases out of a of the logistics & supply chain advisory
even though they won't be immediately good quality infrastructure that one has and execution support firm Aviral
visible, but the time and money invested already built,” he said. Consulting, took an example of how
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