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Venkatesh Ganesh Bengaluru | Updated on January 09, 2018

Start-ups look to disrupt logistics sector by luring customers with convenience

Personal concierge start-ups such as dunzo, LegalDesk, DoneThing and others are looking to the disrupt the centuries-old logistics sector, by luring customers with better convenience.

Since 2015, at the peak of the e-commerce boom in India, Kabeer Biswas, co-founder of Dunzo, which runs errands for a fee, was bombarded with many questions — why does he think picking up stuff and delivering it would be such a good business idea, the capital-burn in the business, etc? These questions were temporarily put to rest when Google decided to invest $12 million, which includes a minority stake, in dunzo.

“The need for dunzo was born out of personal needs to do errands, which was time-consuming and at a lot of times, a pain,” says Biswas.

For investors, information is the holy grail, and for the next billion to use the internet, a differentiated experience is needed.

Similar ventures have followed suit and are seeing an opportunity in this. A new generation with higher disposable income and packed work schedules have given wings to ventures of this kind.

“A person making ₹7-12 lakh annually does not mind paying 100 odd bucks for picking up some stuff or getting their Provident Fund returns in another city,” says Rohit Pansari, co-founder of DoneThing.

Not enough time

Agrees Krupesh Bhat, co-founder, LegalDesk. “Between working a full day, running errands and juggling your multiple responsibilities, it is easy to feel like there is never enough time in a day to get it all done,” he says.

For example, drafting a will, requires going to a registrar’s office, bringing witnesses and even suggesting lawyers, all of which are done by ventures such as LegalDesk.

The pick-up and delivery business needs to be viewed from the lens of the logistics sector, which spawned several local courier companies.

While many companies mushroomed, they all offered the same services — a consumer goes to the drop-off centre, pays and gets the job done.

Logistics and more

What the concierge start-ups are doing is, not only enabling pick-up from a location of the consumer’s choice but also performing chores, which a courier company never did — such as picking up pet supplies or helping senior citizens buy medicines. “We saw an opportunity in providing personal concierge services for the healthcare sector,” says Anurag Prasad, co-founder of on-demand healthcare service provider Visit.

Another reason for ventures getting into this space has to do with business establishments either not wanting to deliver products in the outskirts of the city or not offering same-day delivery.

“In Chandigarh, you will not find any e-commerce retailer doing same-day delivery,” says Sanjay Dhakar, Vice-President - Operations, Jugnoo, which recently launched its Fatafat service. He adds that in most cities, food-delivery companies do not deliver to people living in the outskirts, opening up new vistas for Fatafat.

Going hyper-local

The opportunity of hyper-local has been doing the rounds for some time now.

However, it failed to take off, as the first avataar, which included food-delivery start-ups, indulged in several wrong practices such as fake orders, billing discrepancies and unreliable manpower, according to reports.

The start-ups that BusinessLine spoke to said they conduct Aadhaar-based background verification and credit checks of those delivering high-value items.

The market for hyper-local services is estimated to be ₹2,300 crore. According to Inc42 DataLabs data, the sector has garnered around $175 million in funding in 47 deals till September this year.

Courier companies seem to be not so deterred by these start-ups. A senior executive from an Indian logistics company said that for the start-ups, the bigger challenge is understanding the business around delivery and sustaining it for long periods.

Published on December 20, 2017

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