While online retail in India has seen tremendous growth and is expected to touch the mark of USD 14.5 billion (over Rs 88,000 crore) by 2018 (according to industry estimates), the rise would not have been possible without a robust back-end infrastructure providers.
Logistics solutions providers or e-commerce enablers play a big role in making or breaking an ecommerce business. The logistics industry has seen a remarkable change in the past few years. It is no more a plain courier service; it has now turned into low cost speedy delivery mechanism.
Along with the interest of big logistics players like Gati, Indian Post, Bluedart, among others, some of the start-ups in this space are Dehlivery, Ecomm express, Nuvo Ex, Unicommerce, Shadowfax, among others.
The logistics space has seen a spate of venture capital-led transactions over the course of 2015, with startups raising funds from marquee risk capital investors including Sequoia Capital, Accel Partners, and Sands Capital among others.
A significant portion of this logistics funding is being used to build a robust technology backbone to cope with some of the biggest pain points from optimisation of manpower to slow technology adoption by merchants, broken internet connectivity and the poor mapping system in the country.
“Logistics has become one of the prominent industries recently since more and more people turned towards e-tailing from brick and mortar business. However, to match up with the growing needs of the ecommerce industry logistics service providers need to support multi-channel strategies of their customers. The intricacy and vitality of the supply chains require advanced Information technology solutions,” Santanu Bhattacharya, senior vice-president of tech and product, Delhivery, points out.
Mumbai-based on-demand hyperlocal logistics startup Shadowfax has recently said that the company is opening a research and development centre, which will focus on new product launches and data analytics.
The centre, to be set up in Bengaluru, will house more than 60 employees, making it the largest operations setup for the startup.
“To make hyperlocal logistics efficient and optimised, it becomes critical to leverage technology to bring down costs and save on time,” Vaibhav Khandelwal, cofounder and CTO, Shadowfax was quoted as saying. “The R&D team will focus on getting these innovations fastest to our customers.”
Similarly, Gurgaon-based Delhivery is eventually turning to become a data company with a significant business in logistics. The company is working on a clutch of new technological advancements targeting India-specific problems.
“E-commerce has reached the heart of the country but the numbers shopping online are still low; among 250 million potential customers, only 15-20% shop online. There is still a large share of potential customers but to grab their attention, data science is required. We are working on the ways in which we can teach an artificial intelligence machine to use the areas of data science to understand the way these addresses are interpreted by humans, ” Bhattacharya says.
“Based on the understanding of this, we are trying to make a functional map of India that can be used not just by Delhivery but also by other companies,” he adds.
Meanwhile, Bengaluru-based first-mile logistics startup Parcelled is also ramping up its technology team to 70 from 30 in the next six months and hiring for top-level technology profiles like data architects and scientists, according to Chief Technology Officer Nikhil Bansal.
India’s logistics industry was valued at around USD130 billion in 2012-13, according to the latest figures available with India Brand Equity Foundation.