The logistics startups are not only hiring to meet the demand for the festive season but also looking at growth beyond it
Logistics startup Shadowfax plans to increase by 50% its monthly active delivery partners and ground executives, while Delhivery is hiring over 10,000 off-roll employees
Logistics startups are looking at expanding their reach to new pin codes to cover the entire country with their operations
The onset of funding winter this year brought an end to the funding boom witnessed by the Indian startup ecosystem in 2021. With an eye on increasing their runway amid funding crunch, many startups resorted to layoffs to cut expenses. According to Inc42’s Indian Startup Layoff Tracker, over 12,500 employees have been laid off in 2022 so far. The ecommerce sector was one of the most affected sectors with over 2,100 employees losing their jobs.
However, the anticipated increase in demand during the ongoing festive season seems to have turned the tables, with many startups on a hiring spree now. From ecommerce marketplaces to D2C brands to ecommerce solutions providers, startups are hiring at full swing to meet the demand uptick.
According to consulting firm Redseer, the ecommerce platforms in the country registered total sales of INR 24,500 Cr ($3.5 Bn) during the first four days of the festive season sales for 2022, almost 1.3X higher than last year.
Moreover, online sales were predicted to grow 28% year-on-year to INR 41,300 Cr during the first week of the 2022 festive sales.
It is a no-brainer that logistics partners play a very crucial role in the last-mile delivery for the ecommerce players. Anticipating the expected rise in demand, many of the logistics startups started ramping up their tech stack and infrastructure a few months ago to prepare for the festive season.
Besides the festive season, there has also been an increase in the number of online shoppers in the country with new users coming in from all the corners of the country. To cater to this, the logistics players are not only increasing their workforce but also expanding operations.
Logistics Startups In Hiring Mode
Bengaluru-based supply chain and B2B ecommerce marketplace ShakeDeal, which currently has about 150 people (with about 10-15% off-role/contract staff), is looking to double its workforce by the end of the year on the back of strong tailwinds for its offerings, its cofounder Akash Hedge told Inc42.
ShakeDeal is planning to double its product, technology, procurement, and sales teams.
“We’re also adding considerably to our operations team and support teams such as finance and HR. The idea is to hire just enough resources to supplement the efficiencies brought about by our technology while enabling greater output delivery per resource,” Hedge said.
In late August, logistics unicorn Delhivery also announced plans to create over 75,000 seasonal jobs pan-India over the following six weeks. “This will cater to the significantly higher volumes during the festive season with both its parcel and express part-truckload businesses,” it said.
Of the total, Delhivery said it would hire over 10,000 off-roll employees across its gateways, warehouses, and last-mile delivery centres. It also revealed plans to double down on its partner programs.
Meanwhile, logistics startup Shadowfax, which currently has a team size of more than 35,000 transacting riders, is planning to hire 50,000 new riders for the festive season, its cofounder and COO Praharsh Chandra told Inc42.
In addition, the startup is also looking to increase its existing base of over 2 Lakh monthly active delivery partners and ground executives by about 50%. “We will be onboarding delivery partners, ground executives and loaders or unloaders for the peak; we have a partner or freelance model for delivery partners,” Chandra noted.
Expansion To New Pin Codes
The number of online shoppers is growing steadily in the country. India’s ecommerce market, which currently has 165 Mn online shoppers, is expected to have 350 Mn online shoppers by 2025, as per Inc42’s The State Of Ecommerce Q3 2022 report.
A large number of new online shoppers in the country are coming from Tier-2, 3 cities and beyond. Flipkart and Amazon, which currently dominate the ecommerce market in the country, recently claimed to have seen robust growth in users from Tier 2 and Tier 3 cities during the initial days of the 2022 festive season.
While the number of Amazon Prime members grew 1.9 times compared to last year, 68% of the total new Prime sign-ups were from Tier-2 and 3 cities. On the other hand, Flipkart also claimed to see healthy growth in the number of ‘Flipkart Plus’ customers using ‘early access’ during the sale, with higher participation from customers beyond Tier 2 cities.
Taking cue from this, logistics startups have chalked up plans to expand their footprints to new pin codes in the country. For example, iThink Logistics is focusing on expanding into major Indian hotspots, including Tier 2, 3 cities.
“Over the last year, we’ve added several cloud fulfilment centres and dedicated fulfilment centres across India to cater to the large order book we’ve been building up. When we stabilise operations from these new locations, we’ll be able to further leverage these fulfilment centres while onboarding and catering to new customers,” ShakeDeal’s Hedge said.
Meanwhile, ShadowFox plans to expand its operations across 100% pin codes in the country. It also intends to increase its teams in cities where it already has operations.
“Our current focus is on building hyperlocal and inter-city categories where we are already operating. We aim to strengthen our fundamentals besides expansion and density improvement in these locations,” Chandra said.
Pandemic-Led Boom In Logistics Sector
According to Inc42’s ‘The State Of Indian Startup Ecosystem’, India’s overall intercity road logistics market is projected to reach a size of $299 Bn by 2025.
The last two years were a game-changer for India’s logistics industry. While the onset of the pandemic posed several challenges for the sector, the rise in online shoppers on ecommerce platforms amid fear of contracting the virus led to a sharp increase in demand for logistics startups. The high demand and growth made the sector attractive for investors who poured in millions of dollars in the startups.
Between 2014 and September 2022, logistics startups in the country raised $4.6 Bn, out of which $2.2 Bn came between 2020 and September 2022. India also minted several logistics unicorns during this period including Shiprocket, Xpressbees, Blackbuck, among others
Earlier this year, logistics unicorn Delhivery got listed on the bourses as well.
India’s ecommerce market is estimated to reach a size of $400 Bn by 2030, and this will provide tremendous growth opportunities for the logistics startups in the country. The sector is gradually moving towards an organised technology-led infrastructure to reach the remotest corners of the country. While the festive sales create seasonal demand, the demand is poised for long-term growth and the startups would need to continuously invest in infrastructure and technology to address this.
