India is home to more than 800 D2C brands, but inefficient logistics operations are eating into their revenues and hindering nationwide growth
From in-house logistics to courier services, marketplaces and 3PL players, the options are many for D2C brands, but choosing the right delivery partner is a tough task
Delving deep into the various challenges that D2C brands face in logistics management, we have listed industry best practices and underlined the most efficient methods to optimise logistics costs
In the past decade, the rising consumer preference towards the direct-to-consumer (D2C) ecosystem has seen little-known Indian brands emerge from obscurity and cater to mainstream demand. The growth that followed and the customer trust gained through enhanced engagement and quality commitment worked wonders for many as these D2C companies managed to reach the coveted INR 100 Cr revenue mark in record time. Yet, traditional Indian brands have shown a strange reluctance to adopt pure-play D2C models, unlike the US, where businesses stay in charge of the entire cycle (right from procurement to manufacturing to shipping and last-mile delivery) without spending too much capital or resource in non-core activities. “As a brand grows, logistics operations can quickly become tricky, leading to cost escalations and erosion of profits. At this juncture, businesses should explore opportunities to partner with a logistics solution provider that have expertise in end-to-end supply chain management. This will bring operational efficiencies and customer satisfaction in the long run,” says Ankit Kaushik, cofounder and COO of Pickrr, a Gurugram-based third-party logistics aggregator.“One area where brands can immediately take action is packaging. Carriers cite over-packing as a key reason for cost escalation. On the other hand, poor packaging not just hampers customers’ perception of the brand but also leads to higher RTOs, ultimately impacting the bottom lines negatively,” says Kaushik of Pickrr.“Partnering with a third-party logistics provider helps a seller utilise workflow automation, significantly drive down logistics costs, enhance customer satisfaction, and most importantly, allows the brand enough time and means to focus on other key areas of the venture that might have been neglected earlier,” says Saahil Goel, cofounder and CEO of Delhi-based Shiprocket.
The narrative seems to be changing in India as well. Much as one likes to stay in control, most brands are now seeking third-party services instead of developing in-house capabilities to cut down on costs and cut through the complicated mesh of end-to-end operations. In essence, smart businesses now love to stay lean and agile to focus on their core competencies and succeed fast. And the quick implementation of this business rationale is clearly helping the new-age, tech-first D2C brands rise and shine.