3. The e-tailers Market3
Commerce, once relegated solely to the confines of retail shops and stores, has now moved to
online mediums.
International players like Amazon, eBay and Alibaba with deep
pockets have also entered India’s ecommerce market. Big
players like them claim to have more than 50% of their
revenue coming from mobile apps.
Growth depicted by home-grown players such as Flipkart and
Snapdeal is indicative of the immense potential that the
ecommerce market depicts
4. The e-Logistics Market4
According to the Gurgaon-based consultancy Technopak, the $2.3-billion (Rs 13,800 crore) Indian
eCommerce sector will touch $32 billion (Rs 1.92 lakh crore) by 2020. While the overall retail
market continues to grow at close to 6 percent (year-over-year), compounded annual growth rate
estimated for e-tailing in India is approximately 50 percent over the next five years 6%
X
70 The revenue for logistics industry from inventory based consumer e-
commerce is expected to grow by 70 times to $2.6 billion by 2020.
What sets e-tailing apart from the traditional retail market is the convenience of getting the product delivered
to your doorstep and the access to a variety of products not easily accessible to many customers. All this is
facilitated by logistics – the backbone of the online industry.
5. Etailing – Logistics Tier 2 & 3 Cities5
Logistics start-ups are playing a critical role to help the
logistics issue with the new e-tailers that are starting
and help them during the peak seasons. There are
various challenges for these logistics companies as the
consumer behaviour in India is slightly different.
Tier 2 and 3 cities are expected to contribute to
more than 350 million2 e-tailing shipments in
2018, exceeding the demand from traditional
retailers. In order to take advantage of this
demand, it is essential to develop a network of
branches and delivery points that will be able to
service high-growth cities
6. The Challenge6
This growing trend has further complicated the
market by ever-shortening delivery timeliness,
doorstep delivery, traceability solutions and reverse
logistics along with Poor ‘last mile connectivity’ due
to missing links in supply chain infrastructure.
“ “
7. The Logistics Solution – 3PL7
While logistics is the biggest challenge in e-tailing, it is also the key differentiator between “e-tailers.”
This industry is in the midst of emerging macro trends, and adapting logistics to accommodate these
trends will determine any future success.
The industry is faced with significant hurdles with respect to infrastructure, governance and regulation.
Low internet penetration of 11% as compared to world average of 34% impedes the growth of e-commerce
by limiting the internet access to a broader segment of the population.
A 3PL can help its customers navigate the complex world of
Omnichannel supply chain network.
9. The Competitive Landscape…9
Ecom Express: Launched in Jan 2013, they are making about 85,000 shipments a day. Claims to
cover 207 cities and 2240 pin codes was founded by T. A. Krishnan
Funding: Warburg Pincus / Peepul Capital LLC funded Ecom Express in 2013-14 $133M ( Private
Equity) / $16.5M ( Venture). It has raised $154.1M in 3 rounds. The latest round was in 2015 : $5M
GoJavas: Launched around in 2013 by Vijay Ghadge , and their first client was Jabong - the online
fashion and lifestyle etailer. Today it serves 200 companies and claims that it delivers to 2300 pin
codes and covers about 105 cities.
Funding : $20M in 1 Round from 1 Investor / $20M Venture on October 7, 2015 ( Snapdeal )
Delhivery: Was started in April 2011 by Sahil Barua and two others who worked at Bain and
Company, a consulting firm. Claims to cover 175 cities, 3600 pin codes and does about a lakh
shipments a day.
Funding : Sep, 2014 : $35M / Séries C ( Multiples Alternate Asset Management) & May, 2015 : $85M
/ Series D (Tiger Global Management)
10. 10
Holisol Logistics: Started in 2009, offers warehouse consulting solutions. A year ago it expanded to
deliveries. It is a single vendor for logistics, warehousing and fulfilment services for seamless flow of
information. The company has set up a one-lakh-sq-ft warehouse for Jabong and a 1.6-lakh-sq-ft
warehouse for FabFurnish at Jamalpur and Bilaspur in Gurgaon, respectively.
Funding : First venture capital funding of $1.5 million Sundeep Bhandari, director and chief executive
officer of DataVision Software Solutions Pvt. Ltd, a software development and data processing
company.
Pickingo: Launched in December 2014 by a team of IIT-IIM graduates -by Rahul Gill (Co-founder) /
Piyush Sharma (Co-founder) / Atul Mittal. Pickingo started with reverse-pickups for e-commerce
players such as Jabong, Snapdeal, Shopclues, and PayTM across six cities. It recently entered the
on-demand hyperlocal delivery segment and has witnessed significant merchant adoptionfounded
(Co-founder)
Funding s: $1.3M in 1 Round from 2 Investors( Orios Venture Partners / Zishaan Hayath
Ekart :The e-commerce company created eKart as a separate brand to serve WS-Retail, the B2C
side of Flipkart and currently reaches consumers in about 150 cities. It was founded in 2007 by CEO
Sachin Bansal & Binny Bansal.
Funding s: Last year, the company had raised $360 million. So far, It has secured $560 million
from investors such as Naspers and Dragoneer Investment Group.
Competitive Landscape (contd.)
11. 11
Dotzot: Launched by DTDC in June 2013 with a delivery network of 8000 plus pin codes
and 2300 cities & Founded by Subhasish Chakraborty Founder, Chairman and MD of
DTDC Courier & Cargo Ltd.
Gati E-connect: is another one which has also joined this logistics service. They claim to
reach 5120 direct pin codes and reach to 15,400 remote pin codes enabling to reach
your business to the remote places promoted. Mahendra Agarwal is the Founder & CEO
of Gati Ltd.
Founded in 1982,by Jordanian Fadi Ghandour and Bill Kingson in 1982. / Hussein Hachem
(CEO). Aramex is globally recognized for its comprehensive courier services. Today, it has
a network of 40 independent express companies in 54 countries. Serviceable Indian Pin
codes: 2300
Competitive Landscape (contd.)
13. 3PL GROWTH DRIVERS IN INDIA:13
Facilitators
for growth of
3PL
Strong GDP growth Increased FDI inflows
Consolidation of raw materials
from the vendors
Better infrastructure
Goods and service tax (GST) Logistics parks/ FTWZs
Organized structure of the
logistics industry.
Entry of MNC 3PL players in
India.
Increasing presence of
MNCs in India.
Increasing need to focus on
core competency.
14. Ecommerce Delivery Economics14
• CULTURE AND DEMOGRAPHY
• Historical culture of local store delivering goods on
demand
• Dense population areas, thus smaller delivery
distances in last mile
• Vertical growth in most cities rather combined
with sprawl
• Urban population already 40%, slated to go up to
60% by 2025 across markets
• SLOW GROWTH OF ORAGNIZED RETAIL
• Very high and growing real estate cost makes
spread of organized retail very difficult
• After 15 years, organized retails and retail chains
less than 5% of retail sales in many markets
• FDI in retail restricted/ not permitted, but allowed
in logistics
• GENERATIONAL SHIFT
• Internet users with PC access over 100mn and
with Mobile based Internet access over 300 mn
• Most users in age group of 16 to 25, as they
become comfortable with home delivery-
purchasing will shift towards online
15. Ecommerce Delivery Economics (contd.)15
• In-person delivery possible due to availability of
large number of Delivery Boys
• Delivery boy costs Rs. 5000-8000 pm in metro
and Rs. 4000-6000 in mini-metro
• Each delivery boy can handle 15-20 deliveries a
day, thus about 500 deliveries per month
• Thus, cost of delivery in last mile Rs. 10 to 15,
fuel + bike cost Rs. 5-8 per delivery- thus last
mile cost of Rs. 15 to 30 per delivery
• Thus cost of delivery is 0.1% to 2% of cost of
goods- based on type of goods
• Thus, home delivery is an attractive option for E-
commerce as well as Brick and Mortar stores
• With better planning tools, technology and right
product mix- Home Delivery costs can be
improved without reducing service levels
19. The Logistic Essentials- Fulfillment19
Pin code
covered/Last Mile
Delivery
Own Network vs.
3rd Party Network
Delivery times for
Tier 1, Tier 2, Tier
3 and Tier 4 cities /
regions
Rates
Dedicated
Relationship
Manager/Call
Center Support
Damage and
return policy
Forward and
Reverse Logistics
Packaging Weight vs Rate
Warehouse
Management
System
20. E-Commerce Logistics Solution20
Order Integration
• Web-service based integration
• Auto creation of CN against
orders
• Order validation and pin-code
based allocation
Warehouse Management
• INBOUND- Arrival GRN to put away
• OUTBOUND- Order execution and
pick run
• INVENTORY- SKU level and location
level tracking
Outbound Operations
• In-scan to verify orders
• Manifest and Bagging
• Web-service integration with
logistics partner
Delivery Operations
• Bag as well as CN level in-scan
• Delivery Run Creation and Zip
based Allocation, Biker
management
Mobility Solution
• Mobile based delivery update
• Routing based on GPS and Pin-
code
• Customer Signature Capture
Track & Trace
• Web Service to update
customer web site
• Customer Portal for bulk
tracking
Components
21. Components21
Reverse Logistics
• Order cancellation, failed
delivery, customer refusal
• RTO management
• Warranty execution and
reverse pickup
COD Management
• COD Collection and reco
• Cash Deposit and Update
• Collection Repatriation to
customers
Drop Shipment
• Pin code based Order
allocation for vendor pick-up
• Pickup confirmation and
direct shipment
Customer Contracts
• Rate Contract based on
Metro, Zones, Weight slab
• Automated Rate Application
on booking
• Contract re-invoke
Billing
• Auto bill generation and
e-mail
• Bill generation to
collection cycle
Vendor Payment
• 3PL vendor bill processing
• Freight Audit and
Payment
22. S.W.O.T – 3PL Industry22
The 3PL industry in India has a long way to go to match the benchmarks set by the international firms
and the global 3PL industry. The market is characterized by dominance of unorganized players and is
largely fragmented with slower than expected technology adaptability and penetration. Such features
largely affect the package that 3PLs have to offer. But nevertheless, the trend is positive in terms of
growth of Indian logistics Industry.
The Indian logistics industry is growing constantly at a higher pace and with booming E-Commerce
Market & OMNICHANNEL presences of E-tailing, the need for versatile & omnipresent Delivery &
Logistical solutions has meteorically increased, The market is ready for new players with
commitments to fulfil its demand for ONE-STOP-SOLUTION.
23. S.W.O.T23
Strengths
Critical
Component in
operational
efficiency
Contributor to
Customers
Delight
Expertise &
Resources for
Efficient SCM
Customer
Service.
Weakness
High Costs & Low
Margins Business
Low IT Penetration
High CAPEX
Attention &
retention of Talent
Opportunities
Growing Economy &
market Size
Rising Trend of
Outsourcing
Rising interests in
investments, Global
Mergers & acquisitions
Opportunity to
specialize & cater to
niche markets and
provide one stop
solutions
Infrastructural
Development focus
Regulatory norms and
taxing being relaxed
and regulated for
smoother operations
Threats
Price Competition
from large
operators.
Regulation,
Taxation & Policy
Issues.
High dependency
on infrastructure
development and
networking
capability
24. Some News References24
Reliance Industries Ltd has said it will enrol 150,000 small and
medium vendors for its ecommerce marketplace by the end of this fiscal that will take on the likes of Flipkart, Amazon
and Snapdeal.
