We can now deliver to over 1.2 bn Indians (95% of population): Ecom Express co-founder K. Satyanarayana

September 23, 2020: Ecom Express is an end-to-end technology-enabled logistics solutions provider to the Indian e-commerce industry. Headquartered in Gurugram, Ecom Express was incorporated in 2012 by T.A. Krishnan, Manju Dhawan, K. Satyanarayana and late. Sanjeev Saxena. Ecom Express has its presence in all 29 states of the country and operates in over 2650 towns across 27,000+ pin codes in India. The company recently announced that it is planning to hire 30,000+ employees for the festive season coming in.

In an exclusive interaction with Indian Transport & Logistics News, K. Satyanarayana, co-founder & director, Ecom Express talks about Covid-19, Indian e-commerce industry, the profitability of moving e-commerce goods, investments and the festive season ahead.

In June, Ecom Express announced its plan to hire 7000 employees in 2 months. Let us know the status of the same and explain the demand for these many employees.
Post our announcement to hire 7000+ employees in June, we have increased our workforce by the said number in the last few months to bring our employee strength to 32000+. During the months of April and May, as well, when the job market had been grim, we had been adding employees to our workforce. The hirings were in functions ranging from data sciences to IT development, planning & engineering, strategy, to ground and front line staff in operations. The hirings are commensurate to business volumes as the pandemic is rapidly changing consumer behaviours and has increased adoption levels towards online channels and preference for doorstep deliveries.

Now, with the Industry gearing- up for the upcoming festive season sale, consumer online spend will further see a new high for which we are in the process of adding about 30000 temporary workforce to handle the seasonal upsurge. Having said that, I would like to mention that we also plan to move some of the hires into permanent roles after the festive season depending upon the performance of the candidates.

Incorporated in 2012, Ecom Express grew exponentially to full state coverage in 20 states. What are your new expansion plans?
Our widespread reach has given us an edge in the e-commerce logistics space for being the only private e-commerce focused logistics player to cover the length and breadth of the country in an unmatchable way. We currently serve 100 percent of pin codes in 19 states and 8 UTs and operate in over 2650+ cities, towns and villages. Through this deep reach strategy, we have the capability to deliver to over 1.2 billion people which accounts for over 95 per cent of India’s population.

To further continue serving our customers and end-consumers with fast and reliable delivery in every nook and corner of the country, we have increased our footprint in Himachal Pradesh and North East besides making a foray into Andaman and Nicobar by adding 200 delivery centres thus, taking our count to over 3000 delivery centres. With this expansion, Ecom Express reach now has been extended to 27,000+ pin codes in the country. We have also added over 3 million square feet area across our hubs, sorting and fulfilment centres in Delhi-NCR, Kolkata, Mumbai, Bengaluru, and Vijayawada. All our strategic expansions are directed towards ensuring wide coverage, seamless service and improved experience to customers consistently.

Give us a sense of the geographical shift of logistics demand happening in India due to Covid-19? How Tier 1, 2, 3 & 4 evolving?
The Covid-19 pandemic has had a positive impact on e-commerce and its associated logistics industry. It has cemented customers’ trust further as home deliveries provided relief to them when the movement was restricted t, something which was never seen before. Secondly, e-commerce deliveries at doorsteps are clearly acting like catalysts in driving social distancing norms, empowering the customers and end-consumers in fighting the Covid-19 battle.

Post the pandemic, a change in consumer preference has been witnessed with many transitioning to online shopping, and a rise of new first-time online users as stay-at-home orders has tremendously expanded the growth of the online channel. Most of the demands stem from tier-II, tier-III cities, and beyond. Though initially compelled by the nation-wide lockdown, consumers are finding it a convenient option even as the restrictions are eased. From essential items such as grocery, medicine and health safety items to household appliances, apparels and electronics, people are buying everything online. Covid-19 has certainly resulted in few permanent shifts and one of them is the shift in consumer behaviour leading to an acceleration in online shopping.

Talk to us about the profitability of doing e-commerce express logistics business in India. How Covid-19 impacted the same for your company?
E-commerce logistics is a relatively new-age sector associated with e-commerce, providing the real value addition and tangible solutions to the marketplace, sellers as well as to end-consumers. Thus, any change in the dynamics of the e-commerce industry is bound to impact the logistics partners. In the post-Covid era, the recovery of the e-commerce industry with the spike in order-volume shows a significant thriving period for online shopping in India, and this has a positive impact on logistics, as well as the surge in demand for doorstep deliveries, bring logistics to the centre stage.

Post-Covid, along with etailers, large, medium, and small retail brands and are also innovating and pushing their products through an online channel in reaching their consumer base. Most brands have adopted digital-first strategies and have moved from organized offline to online either directly or through e-commerce platforms, to make up for the lost opportunity. This shift has clearly driven surge in demand for logistics besides the potential of established e-commerce industry players, there has been a considerable uptick in volumes being handled. As a result, we have also been able to generate employment not only in metros but also in tier II, III towns and beyond. Our focus on safety and precautionary measures have become paramount in the wake of the pandemic and service features, such as contactless deliveries, which have taken precedence as we adapted our processes to accommodate alternate mode of CoD payments to provide convenience to end-consumers.

In December 2019, Ecom Express announced the equity investment of $36 million from the UK govt’s CDC Group. Give us a sense of how the fund was utilised, how adequately funded the company is and are you looking for new funding?
The infusion of capital has been towards strengthening Ecom Express’ current reach, expanding operations, investing in technology and automation, attracting key talent and to build a healthy flow in working capital. With the intention to become an enabler and make significant contributions to the growth of the e-commerce industry, the fund infusion has provided the impetus to achieve our company’s vision and drive our growth plans in a more focused manner besides making development impact on job creation, environmentally responsible initiatives and gender diversity. These initiatives have helped us deliver superior customer experience and build a scalable and sustainable business.

In our seven-and-a-half years of existence, we have been profitable for the last two years and will continue to expand with our profitable growth.

What is your view on e-commerce demand in India and what business model changes this will do to Ecom Express?
E-commerce is one of the fastest-growing sectors in India. According to the India Brand Equity Foundation (IBEF) data, the e-commerce market is expected to grow to $200 billion by 2026 from $38.5 billion in 2017. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. Technology-enabled innovations like digital payments, analytics-driven customer engagement and digital advertisements are supporting the growth in the sector. We believe the Indian e-commerce market is still relatively small compared to global markets. There is still a large number of consumers who are yet to experience the benefits of e-commerce and with the rising number of internet users in the hinterlands and our presence in every nook and corner of the country, there is a latent demand waiting to emerge and be fulfilled. Therefore, as dedicated e-commerce focused logistics solutions provider, our focus remains on serving the e-commerce industry.

With five different products under Ecom, talk to us specifically about Ecom Fulfilment Services and how last-mile logistics has changed?
We launched Ecom Fulfilment Services (EFS) in 2017 to offer end-to-end logistics solutions to cater to the warehousing and fulfilment needs of e-commerce marketplaces and sellers. Our foray into this space was to become an infrastructure arm and be a critical component of the value chain in support of businesses for necessary physical space to store all products, which is beneficial for merchants without the capacity to directly manage inventory. Through EFS, we offer a range of services such as Pick-up, Quality Check, serialization, put away, real-time inventory management, order management (pick, pack and ship services), while also managing returns, invoicing and payment reconciliation. EFS enabled us to be the single point of contact for multiple services, such as warehousing, order fulfilment and last mile, provided to e-commerce players.

We currently own 24 fulfilment centres strategically located in key geographies across the country, with recent addition in Delhi-NCR, Kolkata, Mumbai, Bengaluru, and Vijayawada, to meet the dynamic needs of e-commerce and bring our customers’ inventory closest to end-consumers to ensure on-time deliveries. With more than a million sq. ft. area, our EFS business vertical is growing at a rapid space.

Tell us about your customers and their end customers. How diversified is your business? What are their new demands?
In the e-commerce logistics business vertical, we service around 2000+ brands including the top names in the e-tailing space. E-commerce is and will always be about on-time and reliable deliveries and the demand for adherence to the delivery date. With our wide network and company-owned facilities and manpower, and enhanced efficiency, our endeavour is to provide the best, timely and reliable service to our customers and their end-consumers.

Further, with the Covid-19 pandemic and the increasing number of cases, safety of customers and their end consumers are critical to the entire value chain of deliverables As a responsible enterprise, the company has already put in place the required safety measures across our infrastructure and around people to contain the coronavirus infection. Contactless deliveries have taken precedence and through our digital initiatives, we have facilitated alternate modes of CoD payments to provide convenience to customers.

What we could expect from Ecom Express in a near future in terms of investments & infrastructure?
Ecom Express’ growth trajectory has been commendable and it is one of the fastest-growing start-ups in the country. It grew organically with more and more customers coming on board, and we built volume traction driven by our expanded reach, ahead of the curve over the last 7 plus years.

We understand that technology is increasingly critical to the future of the logistics business and continues to invest in this aspect of its business. In particular, we are improving our customer experience by investing in new-age digital capabilities. It is continuously creating a range of new propositions that enable it to deliver an extended and deeper customer journey through new, digitally powered innovations. We continue to deploy new customer-facing technologies including a revamped web-based customer service portal and strong cloud-based shipment visibility. We are also strengthening our operations by investing in automation, robotics, analytics to manage scale and enhance the productivity across the layers of various functions, such as finance, human resources, operations and network planning.

Building on its long-term financial stability, the company will continue to invest in building its network, new business verticals, and in upgrading its skillset. It will continue its focus to deliver innovative products, based on high performing processes and cutting-edge IT systems and automated solutions in keeping pace the changing dynamics of the market and consumer behaviour

How equipped is Ecom Express to handle the festive demand coming in? And how smart hubs with a high level of automation are positioned for the same?
Like every year, this year’s festive season too is expected to see a surge in online spending. While there is a rising preference for online buying among consumers post the pandemic, most of the brands and retail players are also taking the online route to reach out to customers. All these factors have indicated a strong surge in online order volumes as we go forward. To keep up with the festive demand, we have added over 3 million square feet area across our hubs and fulfilment centres. We have also invested in hi-speed automated sorters with a capability to sort 24,000 parcels/hour at centres and beefed up our network and last-mile headcounts to handle the surge in volumes. We are also creating 30,000+ seasonal employment through September and October months across our fulfilment centres, hubs, sorting and delivery centres to be prepared for the surge in online shopping backed by festival sales and increasing preference to doorstep deliveries.