How Logistics Sector Is Innovating To Meet The Changing Needs Of Fast-Growing Ecommerce Industry

The Indian ecommerce industry’s massive growth in the past two years – the sector is projected to reach $400 Bn by 2030 – is often perceived as the outcome of widespread internet penetration and the rise of online shoppers in the wake of the pandemic. But there is another growth driver behind this boom. Without the tech advancements and timely evolution across the logistics sector, online businesses could not have fulfilled their promise of quick and convenient product delivery.

The homegrown logistics sector quickly rose to the market challenges after the Covid-19 outbreak in early 2020. It helped ecommerce brands in timely deliveries and efficient warehousing, thus ensuring a steady inventory flow and product availability in remote locations. Today, most digital-first businesses, especially direct-to-consumer (D2C) brands, rely on ‘ecommerce logistics’ for pan-India growth.

It is, thus, not surprising that India’s third-party logistics (3PL) market, which stood at around $7.34 Bn in 2020, is estimated to grow at a CAGR of 16-18% to surpass $15.19 Bn by 2025. Among the industry’s most prominent names are Shiprocket, Pickrr (the latest addition to Shiprocket’s house of brands), Delhivery, and more.

Stressing the importance of these players for the ecommerce industry, Champ Alreja, cofounder and chief business officer at GOQii Health Store, said, “They offer a wider geographic spread compared to a single courier company. For instance, if we can’t service one area, we can leverage a third-party logistics company. We could still ship to customers in remote areas during the festive season or even the pandemic due to their wide network abilities.”

The startup that focusses on providing a healthy lifestyle to its customers told Inc42 that across its verticals — GOQii and GOQii Health Store — it has witnessed over 100% growth year on year (YoY).

Logistics Moving Faster, Going Deeper To Tackle Ecommerce Challenges

“Given the increasing competition, it has become essential for tech based logistics companies to understand their customers. Logistics players must offer services in line with their customer expectations so that new-age, digital-first businesses have a long-term relationship with them,” said Gaurav Mangla, cofounder and CEO of Pickrr, on the increasing role and contribution of logistics partners towards post purchase experience and thus the growth of ecommerce brands.

There is no denying that today’s market scenario demands a lot from ecommerce logistics players. Besides timely pickups and deliveries, there are additional responsibilities such as reducing the number of RTOs (return to origin) and in-shipment product tracking and monitoring of goods in transit. These are especially crucial for brands in the beauty and personal care space to ensure customer satisfaction. 

For example, if the consignment is damaged in transit and the logistics partner informs the brand before delivery, the damaged products can be replaced immediately without leading to disgruntled customers and RTOs. Brands, too, can gain valuable insights from such incidents and take corrective action in the future. 

Bhisham Bhateja, cofounder and COO of Gurugram-based The Man Company, concurred. “For a startup, it would be difficult to get another big player at this price point considering that the daily number of orders would be fewer (compared to big ecommerce entities). Plus, Pickrr has helped us with reducing RTOs and its use of white-labelling any communication that goes out of it.”

He further revealed that the 3PL firm helped The Man Company reduce the RTOs by 7% and cover more pin codes. 

“To help solve the issues ecommerce brands face while scaling, we have launched specific solutions to address their pain points,” said Mangla. “For instance, to reduce RTOs, we have launched Pickrr Predict, a value-added service providing predictive customer analysis by considering over 50 parameters against every order and identifying the risk percentage.”

As for faster shipments to remote areas at reduced costs, Pickrr has in place a pan-India network of intelligent fulfilment centres. “Since Pickrr’s Fulfillment facilities are located closer to customers, it is easier for sellers to promise and fulfil fast deliveries with reduced shipping costs. We are working with more than 20 delivery partners and many local courier services to ensure timely deliveries,” added Mangla. Other noteworthy solutions include Pickrr Connect and Pickrr Advantage.

Pickrr boasts of more than 75K ecommerce brands in its portfolio, including legacy brands like Emami and Baidyanath and various new-age brands such as Bella Vita Organic, OZiva, Wow Skin Science, The Souled Store, The Moms Co and more.

The Journey Ahead For Ecommerce, Logistics

Unlike the heyday of big-box retail and in-store shopping, customer experience has now taken centre stage due to the shift in consumer mindset and buying patterns. To build better engagement at a micro-level, brands are becoming more transparent about their processes and procurements and launching regular updates regarding their products and their USPs. Understandably, technology is the backbone of this new-age retail journey.

“We are in the continuous process of providing the right experience to all our consumers. We are constantly working towards improving customer experience from a tech standpoint. We are also focussing on giving our consumers a seamless experience for delivery tracking and making the process more transparent,” said Bhateja of The Man Company.

The startup claims to have clocked 100% YoY growth last financial year and is witnessing a 10% MoM (month over month) growth this year. Furthermore, with monthly order volume more than 5 Lakh, it is targeting a revenue of around INR 225 Cr in FY’23.

According to Alreja of GOQii, besides great products and superior services, an efficient delivery system – one that delivers quickly and keeps customers posted at every step – is important for brands to scale in the ecommerce space. Not only this, the startup was also quick to jump to the metaverse bandwagon with the announcement of GOQii Health Metaverse in partnership with Animoca Brands. 

There is no denying that we are in an era of digitalisation where customers are impatient to receive their orders and options are abundant in the market. Complicating matters further is the growing number of online shoppers. 

In such scenarios it is clear why brands across segments need to focus on customer’s experience on the platforms and with the products. They must not only zero in on the most relevant data — for insights, strategy and operational excellence — but also improve and build on their post purchase experience to drive scale.

This makes it important for logistics players to innovate and evolve continuously to scale themselves and ensure that their partner ecommerce brands scale up similarly.