Page 8 - ITLN March - April 2022 issue

Cover Story
E-commerce
Logistics
pressure on the e-commerce
companies. “Though consumers are
ready to pay that extra delivery cost
today, it is still a freebie for a lot of
customers after a certain shipping
value. And this cost has to be absorbed
somewhere because logistics costs in
India will go up due to the current fuel
prices,” he said.
“The volume has grown and there is
a need for and enough space for new
players like small logistics aggregators
who can offer a platform to give
customer experience,” he added.
He also said that there is a huge
gap in terms of supply and that
manpower is going to be a key
constraint and differentiator for
express logistics companies going
ahead. “This is going to be a major
challenge. Irrespective of automation,
the first mile and last mile is going
to be purely manpower driven till the
time of drones or something."
6
March - April 2022
Logistics companies
earlier used to say that
my job is to attempt. It's
vice versa today. Your
job is to deliver it is not
an attempt.
Harshal Bhoi
XpressBees
Customer satisfaction is key
Today, CSAT (Customer Satisfaction)
scores and NPS (Net Promoter Scores)
of logistics companies are routinely
monitored, which was not the case before.
“Logistics companies earlier used
to say that my job is to attempt. It's vice
versa today. Your job is to deliver and it
is not merely to attempt. There will be
companies that come up and say that I
will pay only if these (goods) are delivered.
There is heavy pressure in terms of costs
and consistent performance for logistics
companies,” said Bhoi.
Can more players stem the rut in
e-commerce logistics?
With the growth slated to continue by
2030, Yogesh Dhingra, founder, managing
director & chief executive officer, Smartr
Logistics also feels that India needs a
couple of more players to come into
the market because of the growth. The
unorganised sector is especially badly hit.
“Due to the rollout of the GST and the
currency ban in 2016, a lot of unorganised
players are slowly dying. The entire
volume has moved on to the organised
side, the economy is growing, the logistics
sector is growing and e-commerce is
growing. We need more players,” he said.
Dhingra continued, “The existing
players will have to keep investing so
that they can grow at 20 percent plus
The new players like us will come to
share that burden and offer even more
customised and innovative solutions.”
This is the scenario despite the
majority of India’s e-commerce orders
coming from Tier 1, 2 and 3 cities
apart from high-frequency purchases
from metros. Providing the same set
of services to cities beyond Tier 2
however poses a huge opportunity for
e-commerce, according to Kumar of
RedSeer. “This is what will drive the
market growth to close to 30 percent
year on year,” he says.
So, where’s the hitch?
Despite this shift, Prodipto Roy, co-
founder, QuickShift, points towards
the existence of a few conflicts in the
marketplace between the traditional
distribution channels and the new age
e-commerce channels and the need to
find a middle path.
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