The 3PL market has evolved in sync with the $400 Bn Indian ecommerce sector and is estimated to grow at a CAGR of 16-18%
Despite a growing market, many 3PL businesses have failed to meet the rigorous demands of the industry, constantly craving path-breaking but cost-effective solutions
Pickrr’s cofounder and CEO, Gaurav Mangla, details the 3PL player’s key focus areas in 2023
Efficiency, reliability and affordability are the three north-star metrics guiding Indian third-party logistics (3PL) players like Pickrr and its ilk as they cater to the fast-growing Indian ecommerce sector, estimated to reach $400 Bn by 2030.
Driven by the rising demand for efficient and cost-effective logistics solutions across the ecommerce space since the outbreak of the pandemic, the 3PL market is also set to cross $15 Bn by 2025, growing at a CAGR of 16-18% from around $7.34 Bn in 2020, as per an Inc42 report.
However, the growth journey will not be a cakewalk even for industry leaders as the 3PL landscape is intensely competitive and price sensitive, according to Gaurav Mangla, cofounder and CEO of Pickrr.
To stand tall among its many peers, 3PL companies must provide best-in-class shipping, warehousing, inventory management and other value-added solutions to help their clients reduce costs and maximise efficiency at affordable rates.
Developing new products to serve their customers better will also entail many hours of research, careful monitoring of critical industry trends, constant engagement with brands to understand their fast-changing requirements and the usage of AI-ML to analyse millions of data points.
Even then, many 3PL businesses have failed to meet the rigorous demands of the industry that constantly craves path-breaking but cost-effective solutions.
“If you are introducing a product/service that may not have a huge ‘positive’ impact on your customer’s business or cannot add value/dimensions, you can be replaced,” warned Mangla.
In a one-to-one interaction with Inc42’s Trisha Nayyar, Pickrr’s cofounder and CEO Gaurav Mangla shared his insights regarding the company’s growth story from starting up to acquisition by Shiprocket, how the 3PL player achieved product-market fit and a sneak peek at what it takes to launch products.
Launched in 2015 by Mangla, Rhitiman Majumder and Ankit Kaushik, the Gurugram-based 3PL player originally started as a last-mile delivery company. Although Pickrr achieved product-market fit (PMF) within three months by catering to high-volume businesses like healthcare platform 1mg (later acquired by the Tata group), ecommerce marketplace Snapdeal and other companies looking for 3-24-hour delivery windows, the cofounders realised that it was a high-cash-burning business.
Five years, three pivots and countless product iterations later, Pickrr cracked the PMF once more, emerging as a customer-centric and AI-powered 3PL player covering more than 29K pin codes across India.
Things got even better when 3PL aggregator Shiprocket acquired Pickrr in 2022, and the entities started working in sync to bring innovation and transparency to the system.
What, then, are the key lessons and metrics Indian logistics startups must keep in mind when building and launching products?
First, there is the cost-effective value addition that companies must keep in focus. Next, there should be a crystal-clear understanding of why the product is being launched, according to Mangla. Is it for land grab (driving market share), retention, or a mix of both? Also, a new product must enhance one’s revenue.
“Enhancing does not mean simply increasing the revenue. If you can earn higher margins on existing revenue while delighting customers as you change their life, such new launches will make a lot of sense,” said Mangla.
Despite the harsh funding winter and investors insisting on delivering results (read profitability), Mangla said that Pickrr had always launched products to strengthen its vision of seamless customer experience.
“We don’t do new launches for the sake of any VC or under any funding pressure,” he said.
With a chaotic and challenging 2022 now over, Mangla is confident of a fruitful new year.
“As for industry trends, Pickrr is seeing many D2C brands emerging, increasing digitalisation of B2B ecommerce and several offline brands needing faster and more efficient logistics solutions,” he said.
While the 3PL player is working hard on building a cross-border ecosystem, Mangla insists that Pickrr is in no hurry to solve all problems (read opportunities) at once.
“We will focus on two or three key areas where we see good results and have a clear vision of how to scale them at least 5-6X,” he concluded.