With digitalisation gaining prominence during the struggles presented by the pandemic, there has been noticeable growth of the e-commerce and logistics segments with the hyperlocal deliveries emerging as one of the key beneficiaries of this digital transition.
Logistics startups like Delhivery, LetsTransport and Ecom Express have seen a spike in business led by online sales of e-commerce firms and large offline retail brands moving online and tapping new-age logistics platforms to fulfill shipments.
The shift to digital methods of buying due to the pandemic has further contributed to the growth of the e-commerce and logistics segments in the country, as delivery firms seek to avail of the new growth opportunities led by pharmaceuticals, healthcare and agritech companies.
Shipment volumes for us are up by almost 60-70% since pre-COVID levels. The reason for this shift can be attributed to an influx of customers buying through online medium regularly and formal retail brands starting to finally execute their long-awaited digital strategies.”~TA Krishnan, CEO and Co-founder, Ecom Express
Logistics giant E-com Express has recorded a 40% jump in customer base owing to the faster digital adoption in smaller cities during the pandemic.
With the transition towards hyperlocal deliveries, online grocery has emerged as a victor by registering high growth and demand in the pandemic. Even After the introduction of hyperlocal deliveries in April, Ecom Express has started working with different firms, especially grocery.
This shift towards digital mode is deemed to scale even newer heights.
There may be a minor reduction of 5% in volumes as customers resort to offline establishments, and restrictions in movement becoming tighter, Mr Krishnan said.
With the stage set for hyperlocal deliveries and digitalization to gain more prominence, there has been noticeable uptick for truck aggregators like LetsTransport. This intra-city truck aggregator witnessed its total shipment volume grow to 45% higher than pre-covid levels between March and September driven mostly by the essential goods category.
With e-commerce sales peaking within October-November, the company said it has almost doubled its monthly shipment volume compared to pre-COVID months.
“Traditional truckers, operating within city limits used to find business previously by standing in front of warehouses or mom-and-pop stores. With establishments being shut and dynamic lockdowns, a lot of this unorganised segment lost jobs. During this time, we saw organic signups (of truckers), due to word of mouth shoot up by 20% on our platform”, said Pushkar Singh, co-founder and CEO, LetsTransport.
The firm added nearly 15000 new truck drivers in lockdown months.
Mr Singh spoke about how in recent months, B2B retailer deliveries from firms such as Jumbotail and Udaan witnessed huge growth, with hyperlocal deliveries directly to customers from e-grocery players such as BigBasket and Grofers gaining steam.
We are now seeing new demand from pharmaceutical companies as we run pilots in this segment and onboard traditional manufacturers of cement, ceramic and paints. Shipment volumes will see a further 60-70% growth in the next 2-3 months.”~Pushkar Singh, Co-founder and CEO, LetsTransport
SoftBank-backed logistics unicorn Delhivery Pvt Ltd has also seen a rise in business with e-commerce sales, as large offline brands are moving online.
We expect the momentum to continue as offline brands will kick start the end-of-season sale in December. We saw higher salience of Tier 3, 4 cities owing to higher number of new online shoppers. The underlying supply chain market in India(including express, warehousing, full-truckload, part-truckload freight, etc.) is over $150 billion in size today. This large market can support many players focused on various specific areas of the supply chain.”~ Sandeep Barasia, Chief Business Officer, Delhivery Pvt Ltd
Responding to the growth, Delhivery has added around 4 million sq. ft. of additional warehousing space this year, including two mega facilities in Bilaspur and Bhiwandi.
“Logistics as a segment continues to be a difficult space to disrupt through technology, requiring deep operational capabilities, which can act as a barrier to entry for new players. With a large market size, and opportunities to solve for inefficiencies of supply chain; the market is still in its nascent stage, leaving room for growth for existing players” said Pankaj Makkar, managing director, Bertelsmann India Investments, which has invested in logistics companies including LetsTransport and Shiprocket.
He also foresees the possibility of the future disruptions in logistics to occur in nuanced segments like cold-storage supply chain, farm-to-fork agritech models, with the emergence of more vertical-focussed delivery platforms.