Last-mile delivery of products: Grab to expand footprint in 4 more cities

Virendra Pandit Ahmedabad | Updated on January 15, 2018 Published on April 03, 2017

The country’s first hyper local delivery service aggregator Grab, which raised $1.2 million (Rs 7.8 crore) two years ago, is all set to expand its footprint to four more cities in 2017, offering last-mile delivery through motorcycle-riders to a number of businesses across sectors.

Grab’s logistics service bridges the gap between businesses and merchants and their consumers in sectors such as restaurants, e-commerce companies, retailers, grocers, pharmacies, food technology platforms and banks. These businesses outsource their last-mile delivery to Grab, which offers them a dedicated model to support and sustain their logistics leg. Its riders are connected via a technology platform that allows merchants to book delivery requests and obtain real-time updates.

Mumbai-based Grab, founded in 2012, currently offers these Uber-like services in 12 cities of Maharashtra and Gujarat, besides Delhi-NCR, Bengaluru and Hyderabad. “This year, we will expand to four more major cities,” Pratish Sanghvi, Director and Co-Founder, told BusinessLine. However, he declined to identify these cities, saying a final decision was yet to be taken.

Unlike delivery boys of food items such as pizza, who serve a particular outlet and get a fixed salary, Grab’s bike-riders serve a number of outlets from diverse sectors, providing them logistics for last-mile delivery. This last-leg component of supply chain has a huge demand, he said.

Grab’s freelance bike-riders’ working hours are flexible and they get paid per trip on a weekly-basis. “Some of the part-timers — students and individuals having a bike and whoever wants to earn extra bucks in their spare time — can earn anywhere between Rs 18,000 and Rs 50,000 per month, Sanghvi said. These riders are not employees on the Grab platform but its networked associates.

“Even though this is a B2B2C model, we don’t interact directly with the customer and don’t get paid on cash-on-delivery basis. We only provide last-mile delivery through our aggregated around 2,000 delivery boys and 1,500 merchants. Our delivery boys come from different sections of society. They can work any number of hours. Nearly 30 per cent of our fleet are part-timers.”

Sanghvi said apart from geographical expansion to four more cities, Grab is expanding vertically, too, with more merchants and sectors being tied up. “Anyone that has a last-mile delivery demand, can come to us.”

How does Grab get paid? He said 98 per cent of client-merchants pre-pay Grab through mobile wallets.

E-commerce and intra-city transport and delivery of goods is estimated to be a $10-billion industry in India.

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Published on April 03, 2017
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