Riding the direct-to-consumer (D2C) wave and the push triggered by the Covid-19 pandemic, the ecommerce market size in India has reached $84 Bn in 2021 and is forecasted to reach $200 Bn by 2026. One of the major factors contributing to this growth is the surge of new players entering the digital arena — from startups looking to disrupt the market with innovative products and services to brick-and-mortar businesses adapting to the new normal — as everyone wants a piece of the ecommerce pie.
The country’s digital capabilities have also played a significant role in solidifying the ecommerce framework. Additionally, a host of other factors ranging from the government promoting digital payments, especially the Unified Payments Interface (UPI), to the pandemic-induced lockdowns have given a major boost to online shopping. According to a report by the Competition Commission of India (CCI), India’s ecommerce is growing at the fastest pace in the world at an annual rate of 51%.
But the challenges are still many before ecommerce emerges as the default option for shopping. As of now, India is home to 130 Mn online shoppers, out of which 80 Mn were added in the past three years, according to a report titled Decade of D2C – Disrupting the next decade of shopping, published by financial services firm Avendus Capital. Understandably, the sector has taken big steps to cater to the digitally uninitiated and price-conscious consumer base with solutions such as provisions for easy returns to build trust.
In spite of the recent shift towards online shopping, one of the toughest challenges that most ecommerce platforms face nowadays is faster delivery time, as very few companies offer same-day and next-day deliveries. The delay between ordering and delivery is a crucial criterion that has hindered ecommerce from emerging as the most preferred choice of commerce.
Until recently, online e-retail giants Amazon and Flipkart — powered by their warehousing capabilities and a high number of delivery agents — were the only ones that could implement one-day or two-day deliveries. Other businesses keen to adopt the digital commerce model due to its wide reach and convenience had been left behind due to their lack of a pan-India network and prohibitive logistics costs.
But the scenario seems to be changing now as the D2C wave has caught on, the business aspirations of small and local brands have flared and new opportunities are cropping up to help companies go digital without spending a fortune on in-house setups or depending solely on ecommerce marketplaces for sales.
As most of us are aware, the D2C model enables brands to minimise overhead costs and build a self-sustaining operational framework. But this has to be done in an agile manner instead of building an independent platform for the entire gamut of services. Until recently, most brands were selling their goods on ecommerce marketplaces instead of their dedicated websites, but this practice has certain limitations in terms of profit and growth. In essence, marketplaces charge a commission on every sale, which inevitably reduces every seller’s profit margin. Moreover, selling through third-party platforms affects a brand’s identity, reach and customer engagement as the company does not directly interact with the consumer base out there. This also curtails a brand’s marketing initiatives, including the deals and discounts often provided to repeat customers to build customer loyalty.
However, logistics and last-mile fulfilment are key levers in the ecommerce marketplace, and most of these platforms help their sellers in this area through an efficient mix of in-house and 3PL services. So, for a long time, most brands stuck to them to ensure ‘timely delivery’ despite the pain points mentioned above. Next came ‘platformisation’ and many brands tied up with service experts to deliver meaningful value to customers in a budget-friendly way.
This is where ‘enablers’ like Shiprocket come into the picture. The Delhi-based company, an end-to-end shipping and logistics services provider, launched Shiprocket Fulfillment in December 2020 that claims to fulfil same-day and next-day deliveries for all ecommerce businesses so that the latter can operate without marketplace dependency.
“Due to a lack of defined infrastructure for order fulfilment, Indian D2C brands spend a lot of time on order processing. This results in time and resource waste that could have been utilised for innovation and scaling up. Shiprocket Fulfillment aims to empower these businesses in terms of growth and scaling opportunities,” says Saahil Goel, cofounder of Shiprocket.
A Tech-Differentiated Fulfilment Service
Shiprocket is not a new entity in the D2C enabler segment. It was originally set up in 2012 as Kartrocket and offered a slew of business solutions in the B2B space. But sensing an opportunity in the shipping and logistics sector and keen to offer specialised services, the company pivoted to its current avatar a year later and rebranded as Shiprocket.
Since then, it has helped more than 100K companies, and some of its major clients include earphone startup boAt, toxin-free personal care brand Mamaearth, shaving products company Gillette and more. The company clocked $49.7 Mn in revenue in FY21 and has currently undertaken a bigger challenge — guaranteeing deliveries within a day. Shiprocket Fulfillment takes control of end-to-end fulfilment of orders for its clients and provides warehousing, order processing and last-mile delivery services.
With its new offering, the company is targeting SMBs, which usually lag in the D2C space, given their small scale of operations. Shiprocket’s renewed focus on earliest delivery helps them utilise their resources better for business development and other core activities and still be on a similar footing with big brands when it comes to order fulfilment.
To enhance its existing shipping solutions, Shiprocket Fulfillment offers a couple of new features that include fulfilment centres to make same-day and next-day deliveries possible and an inventory review to ensure that clients can manage the stock kept at Shiprocket’s warehouses for faster fulfilment and optimum usage of storage space. In addition, it uses an algorithm-based system for smart and speedy packaging options and another in-built algorithm to route orders to the most suitable fulfilment centres, depending on delivery speed, pricing and inventory labels.
Using these features and other tools, Shiprocket Fulfillment claims to have streamlined its shipping process to deliver the best results. Since its launch last year, it has acquired more than 200 clients and averaged 1.5 Lakh orders a month, the company claims.
Keeping Warehousing At The Centre Of Fulfilment
At the heart of any order fulfilment lies warehousing efficiency. It may appear to be just a big storing facility that stocks items and brings them out when an order is placed, but a closer look tells us things are much more complicated.
With websites accepting orders 24/7 and customers expecting a 24-48 hour delivery from the time of order placement, a warehouse has to be connected with the backend of the order processing system in real-time. Next comes the challenge posed by inventory management. A storage facility is a big, empty space where products can be kept. But the challenge here is to organise the inventory in a way that will minimise the time for processing, packaging and shipping. This requires a robust tech-based system to monitor the inventory 24×7 and find the easiest way to access products and ship the same. Moreover, the system has to keep track of fast-selling products so that companies get timely notifications and the products can be restocked in time. It will help avoid situations where an order is placed but no stocks are available.
Shiprocket has leveraged its technology and experience in shipping and logistics to build its warehouses or ‘fulfilment centres’, as the company calls them. It has five operational warehouses in Delhi, Mumbai, Gurugram, Bengaluru and Kolkata, and the hubs offer an order processing capacity of 35K a day and a storage capacity of 1.1 Mn units per warehouse. The company is planning to increase the number of warehouses to 25 by the end of 2021.
Shiprocket has also partnered with 14 major courier services such as Delhivery, FedEx, Blue Dart, DHL and more to ensure timely order delivery and thus penetrate the ecommerce market.
“Since day one, we have aimed to democratise the fulfilment system so that any business, big or small, has similar opportunities to compete in the market and scale its operations. As a D2C enabler, we always try to bring better solutions to make the ecosystem more independent, and Shiprocket Fulfillment brings us one step closer to that goal,” concludes Goel.