Courier company DTDC Couriers & Cargo has launched a new specialized e-commerce logistics initiative called DotZot. The report states that this initiative will offer logistic solutions for e-commerce retailers and will be headed by Sanjiv Kathuria.
DotZot claims to be the first pan India delivery network with a reach of 8,000 plus pin codes and 2,300 cities focusing exclusively on the e-retail space. The launch by DTDC comes on the back of the growing eCommerce industry which is currently pegged to be at Rs 55,000 crore of which retail comprises only 10% and the remaining 90% today is made up of travel and other services. E-tailing is however growing four times faster than the travel category.
With logistics playing a key role in the success of e-commerce companies, it looks like DTDC has decided to tap into this market with this market. However, do note that other courier companies like Bluedart, Aramex already have dedicated e-commerce divisions.
The e-commerce industry currently estimated at $10 billion (Rs 55,000 crore) is growing rapidly. However, the key gap that affects the future growth of this industry is lack of logistics infrastructure bundled with customised systems, processes and technology that are imperative for growth. To grow this segment, logistics solution providers will need to transcend from the traditional ‘courier’ processes to meet the modern day demands.
Sanjiv Kathuria, CEO of DotZot said, “E-retail needs a focused, different and innovative approach for order fulfillment. DotZot will be decisive for merchants who are looking at growing and retaining their e-powered customers. E-commerce customers are becoming increasingly demanding and a great delivery experience is the key differentiator that e-retailers can provide.”
The lack of good logistics in tier II and tier III cities is also a big hurdle when ecommerce begins to look beyond metros to grow.
DTDC already provides services in Tier 2-3 cities, through 240 of its affiliate partners, which is also one of the important market for eCommerce companies. According to Abhishek Chakraborty, executive director, DTDC Courier & Cargo, DotZot is targeting Rs 100-crore revenues in three years. “DotZot has been work-in-progress for a year and we decided to set it up as a separate business, because it can help add value to our existing partnership with e-retailers,” said Abhishek. DotZot will reach out to e-retailers and assist them in streamlining the entire delivery lifecycle, cut costs, increase reach and mitigate risks associated with setting up a delivery network. DotZot would take charge right from the time the order is received, from warehousing, to pick & pack, ship and deliver.
There are many other existing players as well who are trying to capture the market as well:
Gharpay.in had raised investment from Blume Ventures, Sequoia Capital and Kae Capital last year, Delhivery had raised undisclosed investment from Indiatimes in June 2012, while Chhotu.in had raised angel investment from Global Super Angels. Other players in this space include Holisol and Mudita among others. As stated earlier, Bluedart and Aramex also have dedicated e-commerce divisions.
In December 2012, Rocket Internet-backed Jabong had launched third party logistics service called JaVAS (Jabong Value Added Services), as indicated by a TechCircle report. The company currently claims to have clients like Yepme, Happily Unmarried, 21Diamonds, IndiaToday.in, and Done By None among others.
Besides this, e-commerce ventures like Flipkart and Myntra follow a hybrid logistics model- It has its own logistics service and also partner with other courier companies. While the reach of Flipkart’s distribution network is unknown, Myntra’s distribution network supported 18 Indian cities as of June 2012.
American retail giant Amazon is also said to be readying its entry into India. When it does, Amazon will definitely not enter as a pure play ecommerce company. It will bring Amazon Fulfillment services, the logistics arm of Amazon, for merchants in India (has already built its warehouse).
Looks like there is after all some surprises still left in the Indian e-commerce space. What do you guys think about DTDC’s entry into the market? Will it be a game changer or is it too late? Share your views below: