big share in eCommerce pie
According to Bablu Tewari, COO, Gati-KWE, eCommerce is fundamentally a combination of traditional front end retail management and logistics. The store front becomes virtual, but the retailer’s core business is still ranging from merchandise planning, procurement and pricing. Their added complexity needs to be in developing the virtual storefront and customer acquisition. Anything beyond that is fundamentally logistics, and should be an opportunity for experienced logistics companies.
Over the past year, we have enhanced our traditional distribution capabilities to support demands of accurate, ontime last-mile delivery.”
Bablu Tewari COO, Gati KWE
the main focus on logistics for ecommerce is currently last-mile delivery. Looking at the entire ecommerce logistics space, there is significant opportunity around e-Fulfillment warehousing on the both retailer and vendor sides, consolidated returns handling, installations, inventory planning, and even online presence as another retail channel.
“As ecommerce companies in India mature, it is expected that they will look to equally mature logistics companies that can provide integrated logistics solutions covering more than just simple delivery or warehousing,” said Tewari. In his opinion, winning the race of profitability will need support from more than just cheap deliveries; it will depend upon ensuring excellent customer service after the buy button is clicked, less inventory to reduce working capital costs, the ability to stress fixed assets, and good collaboration between the retailer and logistics service provider.
“There are many new players entering the ecommerce logistics space, but mainly in the last-mile delivery area. These new players focus on limited geographic zones or specific cities. Over time, the ecommerce market is rapidly expanding in non-metros,” Tewari observed. He also pointed out that as online retailers start to engage with their logistics partners as a strategic way of lowering the cost of sale, more mature partners are required who can provide a pan-India presence and proven capability to support more complex end-to-end solutions.
“GATI-KWE is a recognised leader in distribution with a pan-India network spanning 653 of 657 districts in India. Over the past year, we have enhanced our traditional distribution capabilities to support demands of accurate, on-time last mile delivery,” he stressed. Gati-KWE has also started the rollout of a dedicated
parallel network focussed entirely on ecommerce delivery, including value-added services like packing. To support this, the company has also improved its CoD (cash on delivery) infrastructure and remit cash to retailers within seven days and provide the breakdown by delivery docket for faster reconciliation.
“We have three pillars to our ecommerce services portfolio— pan-India last mile delivery, specialised eFulfilment warehouses and an online marketplace. Our value to the industry comes not only from the provision of individual services, but also from the ability to support end-toend solutions, including offshore sourcing, importation, ownership of inventory, trading and inventory planning. Our online marketplace provides an alternative channel to market for our customers and an opportunity to significantly reduce the cost of sale through disintermediation,” Tewari informed.
Tewari asserted that one of the core competencies developed by Gati-KWE is in delivering large-size parcels. The industry has evolved from online selling of services to selling of small packages, which is now moving towards online sales of large parcels like white goods, furniture etc. A lot of companies jumped in delivery of small packages, which are not capable to deliver such big shipments.
“Gati-KWE will aggressively roll out additional ecommerce delivery capacity across India to expand our online marketplace and open additional eFulfillment warehouses in key locations. We are also tapping market for small shipment delivery across India,” Tewari added. He highlighted that new model of e-commerce industry is becoming zero/ least inventory, in which delivery model is just vendor–customer (IT based). The company is focussing aggressively for this model and service will include pick, pack and deliver.