Emer­gence of e-Com­merce

3PL com­pa­nies gear­ing up to tap op­por­tu­ni­ties

Cargo Talk - - Contents - RATAN KR PAUL

e-Com­merce, the buz­zword in the lo­gis­tics in­dus­try too, is pro­jected to be the game changer in the years to come. The 3rd party lo­gis­tics prac­ti­tion­ers, ir­re­spec­tive of their size, are now set­ting their houses in or­der to cope with new trends. Car­gotalk spoke to lead­ing e-com­merce por­tals and lo­gis­tics ser­vice providers to delve into the op­por­tu­ni­ties in this sec­tor and ser­vices re­quired to sat­isfy cus­tomers.

e-Com­merce, the buz­zword in the lo­gis­tics in­dus­try too, is pro­jected to be the game changer in the years to come. The 3rd party lo­gis­tics prac­ti­tion­ers, ir­re­spec­tive of their size, are now set­ting their houses in or­der to cope with new trends. Car­gotalk spoke to lead­ing e-com­merce por­tals and lo­gis­tics ser­vice providers to delve into the op­por­tu­ni­ties in this sec­tor and ser­vices re­quired to sat­isfy cus­tomers.

Cus­tomer buy­ing pat­terns are rapidly chang­ing across the world, and In­dia is cer­tainly not an ex­cep­tion. Ac­cord­ingly, the lo­gis­tics and sup­ply chain is also chang­ing its face to ful­fil the re­quire­ments of its B2B as well as B2C cus­tomers. Stud­ies re­veal that in a con­ven­tional re­tail­ing sup­ply chain, cus­tomers are re­spon­si­ble for pur­chas­ing their goods at the re­tailer’s lo­ca­tion. In this case, lo­ca­tion is an im­por­tant di­men­sion of re­tail­ing. As a re­sult, retailers have to bear sig­nif­i­cant costs to re­tain such an ac­ces­si­ble lo­ca­tion, and to keep and ex­pand their cus­tomer base. Th­ese charges are re­flected in the fi­nal cost of an item, which is passed on to con­sumers. The re­tailer main­tains a level of in-store in­ven­tory which is main­tained by re­gional dis­tri­bu­tion cen­tres, where goods from a wide range of sup­pli­ers are stored.

Stud­ies also re­veal that the rea­son con­sumers hadn’t taken to on­line shop­ping, even af­ter a decade, is be­cause there are se­ri­ous bot­tle­necks that need to be solved first-hand, in­stead by a part­ner. The lack of re­li­able lo­gis­tics and de­liv­ery part­ners meant most play­ers set up their own ware­houses across the coun­try, backed by in-house last mile de­liv­ery net­works. To foster long-term trust, they set up their own in-house cus­tomer sup­port or­gan­i­sa­tions. To get around cus­tomer’s un­will­ing­ness to trans­act on­line us­ing their credit or debit cards, they in­tro­duced and turned Cash-on-De­liv­ery (CoD) into the de­fault pay­ment mech­a­nism. To re­duce the time it took to de­liver a prod­uct to a cus­tomer, they de­cided to buy and hold their own in­ven­tory, in­stead of sourc­ing it af­ter a sale had hap­pened.

How­ever, the sce­nario is chang­ing rapidly, thanks to the chang­ing mind sets of retailers, 3rd party lo­gis­tics ser­vice providers, and end-cus­tomers. e-Com­merce por­tals have es­tab­lished their im­por­tance in this bur­geon­ing mar­ket, part­ner­ing with ef­fi­cient lo­gis­tics ser­vice providers.

Lead­ing Por­tals

Deepa Thomas, e-Com­merce evan­ge­list, eBay In­dia, pointed out that glob­ally, mar­kets such as the US and Europe are ma­ture mar­kets with deep pen­e­tra­tion of In­ter­net, or­gan­ised re­tail and e-Com­merce. In the West, con­sumers are more evolved, off­line and on­line bound­aries have blurred and shop­ping is now done from the con­sumer’s pocket with the advent of mo­bile com­merce. Com­par­a­tively, In­dia

Though e-Com­merce in In­dia is still at a nascent stage, it is evolv­ing at a rapid pace. It is likely to be larger than or­gan­ised re­tail in In­dia.” Deepa Thomas e-Com­merce evan­ge­list, eBay In­dia

has di­verse re­gions, in­ter­net and mod­ern re­tail are still deep­en­ing their reach to Tier-II and Tier-III cities and ru­ral In­dia. “Though e-Com­merce in In­dia is still at a nascent stage, it is evolv­ing at a rapid pace. It is likely to be larger than or­gan­ised re­tail in In­dia,” she said. She high­lighted a re­cent re­port of In­ter­net & Mo­bile As­so­ci­a­tion of In­dia (IAMAI) that has es­ti­mated In­dian e-Com­merce mar­ket to US$ 11 bil­lion in 2013 and an on­line shop­per base of around 14.3 mil­lion con­sumers.

In­dian con­sumers were ear­lier ap­pre­hen­sive about shop­ping on­line and con­se­quently, their fre­quency of pur­chase was low. Over time, their in­hi­bi­tions have re­duced, mak­ing them browse more of­ten and make reg­u­lar pur­chases. As op­posed to pop­u­lar be­lief, In­di­ans are not hes­i­tant to make high-value pur­chases on­line and are will­ing to ex­per­i­ment with their pur­chases. They ap­pre­ci­ate the va­ri­ety of­fered by on­line shop­ping por­tals and scroll through to get the best deals that of­fer value for money.

eBay is a mar­ket­place which pro­vides a plat­form that en­ables brands, retailers, man­u­fac­tur­ers, dis­trib­u­tors, en­trepreneurs (big or small) to reach a large buyer au­di­ence. “eBay In­dia is grow­ing at a faster rate than the In­dian e-Com­merce in­dus­try. On an aver­age day, 13 prod­ucts sell ev­ery minute on eBay In­dia,” she said.

Thomas also as­serted that eBay In­dia played a defin­ing role in shap­ing In­dian e-Com­merce over the last eight years and is com­mit­ted to fos­ter­ing the growth of In­dian e-Com­merce and ac­tively ben­e­fit­ting

As per an AS­SOCHAM sur­vey, the on­line re­tail in­dus­try in In­dia is likely to be worth ` 7,000 crore by 2015.” Praveen Sinha Co-Founder, Jabong.com

con­sumers, mer­chants, brands, retailers and the govern­ment. At the last count, eBay In­dia has con­sumers from more than 4,306 cities/towns.

Praveen Sinha, Co-Founder, Jabong. com main­tained that In­dia is al­ready a boom­ing mar­ket for e-com­merce por­tals. With the in­ter­net pop­u­la­tion ex­pected to grow from cur­rent 100-120 mil­lion to 300400 mil­lion users in next 4-5 years and with in­creas­ing share on on­line shop­pers within this pop­u­la­tion, e-Com­merce is ex­pected to grow ex­po­nen­tially. “As per an AS­SOCHAM sur­vey, the on­line re­tail in­dus­try in In­dia is likely to be worth ` 7,000 crore by 2015,” he high­lighted.

He pointed out that ac­cord­ing to a Coms­core re­port of Jan­uary-May 2013, Jabong.com had the high­est amount of traf­fic on its web­site within a year of its launch. In March 2013, Jabong held an Alexa Traf­fic rank­ing of 44 in In­dia. Jabong also ranked amongst the Top Ten in Google Zeit­geist In­dia trends, mak­ing it the most searched term in 2012 in In­dia lead­ing to our pop­u­lar­ity growth. “We have got very pos­i­tive re­sponse where cus­tomers have clearly men­tioned Jabong.com for the lead­er­ship in as­sort­ment and over­all cus­tomer ex­pe­ri­ence,” he as­serted.

Sinha fur­ther pointed out that on­line retailers are busy in­no­vat­ing new ways and flex­i­ble choices for its cus­tomers to shop on­line. While in some cases where peo­ple wished to touch the prod­uct they pur­chased; gen­er­ous re­turn poli­cies and cus­tomer re­views have now made it pos­si­ble to get an idea of what to buy with­out wor­ry­ing about whether it is ac­cept­able. “A 30-day re­turn pol­icy suc­cess­fully ad­dressed this con­cern for cus­tomers who were not will­ing to make that click on­line, and the con­cept of open box de­liv­ery (check­ing of the prod­uct be­fore ac­cept­ing de­liv­ery) which we of­fer, is con­sid­ered even more delightful by cus­tomers. We also of­fer a zoom-in on the prod­uct im­age to get a 360 de­gree view for an easy es­ti­mate of the size, colour and fab­ric,” Sinha added.

In­fra­struc­ture re­quire­ment

Thomas main­tained that there are two im­por­tant com­po­nents of the in­fra­struc­ture needed for a thriv­ing e-com­merce mar­ket, i.e., pay­ment gate­ways and courier and de­liv­ery ser­vices. “We see the lo­gis­tics (de­liv­ery) com­pa­nies ma­ture far faster than the pay­ment gate­ways. Most courier com­pa­nies have in­vested in tech­nol­ogy and pro­cesses,” she main­tained. She made it clear that eBay In­dia is a mar­ket­place and does not own/keep any in­ven­tory. It is an on­line tech­nol­ogy plat­form that con­nects seller with buy­ers and fa­cil­i­tates trade.

“The chal­lenge faced is on de­liv­er­ies, which need to be made in re­mote cor­ners of the coun­try. In many lo­ca­tions, courier ser­vices op­er­ate on the fran­chisee model, and that im­pacts re­li­a­bil­ity. That said, wher­ever they op­er­ate with their own of­fices, their ser­vices are keep­ing pace with the growth of e-Com­merce,” Thomas pointed out.

In Sinha’s opin­ion, though the skele­ton is ready, there are var­i­ous parts which are yet to be de­vel­oped. e-Com­merce has en­abled to im­prove the over­all sup­ply-chain in­fra­struc­ture in the coun­try. As de­liv­ery is part of the cus­tomer ex­pe­ri­ence, many

com­pa­nies are help­ing to de­velop the sys­tem. “We are happy to pro­vide cus­tomers with the fastest de­liv­ery, within the same day in Delhi and NCR, 48 hours in top cities and within 1-3 days in other cities. We de­liver pan-In­dia with the help of our de­liv­ery part­ners,” Sinha stressed.

Jabong.com has a mixed model for ware­hous­ing. The com­pany be­lieves in large ware­houses sup­ported by mul­ti­ple smaller ware­houses. “The state-of-the-art fa­cil­i­ties that we have to­day are equipped to carry out op­er­a­tions in the best pos­si­ble way. We ad­here to strict rules and guide­lines to main­tain high­est stan­dards of lo­gis­ti­cal op­er­a­tions. Our edge lies in ro­bust mea­sure­ment process and train­ing of our em­ploy­ees,” Sinha claimed. He also stressed on the re­quire­ments from cus­tomers’ side. “They ex­pect re­li­a­bil­ity and prompt­ness in de­liv­ery, and ac­cu­racy and avail­abil­ity of in­for­ma­tion on the ship­ment,” he said.

are Lo­gis­tics Ser­vice Providers ready?

Many cargo lo­gis­tics ser­vice providers have al­ready es­tab­lished sep­a­rate wings to tap the fast emerg­ing e-Com­merce sec­tor. Prem Kumar, CEO, Uni­world Lo­gis­tics said, “Due to the de­mo­graphic pro­file of In­dia, we have a huge pop­u­la­tion of young peo­ple who are net-savvy, de­vice-savvy and are con­nected on­line. Th­ese peo­ple are al­ways look­ing for the best deal, and to­day e-Com­merce sites and on­line mar­ket­places are ful­fill­ing th­ese re­quire­ments.” This group is fiercely in­de­pen­dent and also has a sub­stan­tial dis­pos­able in­come. In his opin­ion, e-Com­merce re­quires ex­cel­lent ware­hous­ing, in­ven­tory con­trols and dis­tri­bu­tion to help the prod­ucts to reach the buy­ers at the low­est cost and in the quick­est time­frame. Due to this, lo­gis­tics and es­pe­cially 3PL will re­ceive a huge shot in the arm. “We at Uni­world with our In­te­grated Lo­gis­tics Park in Irun­gat­tukot­tai, Sripe­rum­budur (near Chen­nai) can of­fer cus­tomised so­lu­tions to e-com­merce sites for ware­hous­ing, do­mes­tic dis­tri­bu­tion, 3PL and 4PL ser­vices,” Prem Kumar in­formed.

San­jiv Kathuria, Di­rec­tor & CEO, Dot­zot, is up­beat about the growth po­ten­tial of the E-retails in­dus­try. “Var­i­ous es­ti­mates put the cur­rent mar­ket size of the e-Re­tail in­dus­try at around ` 6,000 crore. This is grow­ing more than 50 per cent and is es­ti­mated to be­come ` 25,000 crores by 2016. The size of the e-re­tail lo­gis­tics mar­ket is linked to this growth as de­liv­ery to the door step is a manda­tory el­e­ment of e-re­tail. It is es­ti­mated the size of the de­liv­ery mar­ket will ` 2,000 crores by 2016,” he high­lighted.

E-Re­tail needs wide ge­o­graph­i­cal reach, quick turn­around of CoD and ef­fi­cient pick-up of re­turns. “Dot­Zot is the only pan-In­dia spe­cial­ist and fo­cussed de­liv­ery ser­vice provider for the e-Re­tail in­dus­try seg­ment. All our pro­cesses, sys­tems and IT sup­port have been tai­lored for the e-Re­tail

We can of­fer cus­tomised so­lu­tions to e-com­merce sites for ware­hous­ing, do­mes­tic dis­tri­bu­tion, 3PL and 4PL ser­vices.” Prem Kumar CEO, Uni­world Lo­gis­tics

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.