E-tailers gear up for the festival season

| | Updated on: Sep 18, 2015
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Outsource manpower, logistics needs for last-mile deliveries to ensure timely service

With the onset of festivities, many e-commerce start-up companies have discovered how to survive and grow in a season marked by increased online shopping: outsource their manpower and logistics needs for last-mile deliveries.

Interestingly, those in this last-mile delivery business are, themselves, like the start-ups they serve. Delivery vans and delivery boys are an integral part of these business models.

To meet scaled-up requirements and ensure timely deliveries, these players are outsourcing their additional bandwidth requirements. Such services are relieving e-commerce players from the additional burden of seasonal hiring.

Smaller towns

With e-commerce set to penetrate further in Tier-II and -III towns and cities thanks to the ongoing expansion of 3G mobile, manpower and logistics needs of online marketplaces have increased.

“We don’t have a logistics arm and, therefore, use third-party logistics for shipping our products,” Vishal Sharma, Vice-President,, told BusinessLine .

ShopClues has outsourced its requirements to nearly 30 logistic companies with tie-ups at local levels to reach out to its online customers. In fact, it is focusing more on Tier-II and -III destinations as transaction traffic is set to increase from there. “From a 20-25 per cent month-on-month increase, we expect a 70-80 per cent increase in growth by Diwali this year,” he added.

Sharma said these local logistics partners decide how many delivery boys and other infrastructure they would need for last-mile delivery. Typically, a delivery boy is expected to deliver 30-40 orders a day. ShopClues received 15 lakh orders in August and is expecting a 180-190 per cent increase by Diwali.

Online major Paytm has completely outsourced its logistics needs to more than 20 “external logistics partners”.

The company having nearly 50,000 sellers on board charges no listing fee. It, however, typically charges anywhere between 2 per cent and 10 per cent of the transaction value from the seller, which includes marketing fee, payment gateway charges and actual logistics charges — the last one being transferred to the logistics partner.

“From our normal 15-20 lakh transactions per month, we expect an increase by two to three times by Diwali as business from Tier-II and -III destinations has increased significantly,” said Saurabh Vashishtha, Vice-President (Business), Paytm.

Logistics firm Shadowfax, founded in April 2015, caters to Flipkart, Amazon, Food Panda, Grofers etc as their extended arm providing workforce requirements. It currently has a workforce of around 400 employees, including those from rural areas it trained and groomed as delivery boys before employing them.

In expansion mode

“We provide deliveries in a radius of 5-6 km areas in Delhi and Mumbai where we are active at present, catering to hyper local merchants. By September-end, we will reach Bengaluru, too, as we see a 300 per cent growth in this sector where we have little competition,” Abhishek Bansal, Co-Founder, ShadowFax, said.

Truck aggregator firm LetsTransport, founded in January, has tied up with nearly 100 truck-owners in Bengaluru, and e-commerce firms such as BigBasket and

“Our competitive rates bring new customers to us. For instance, local truck vendors charge ₹800 for the first five km of delivery while we charge only ₹350,” said Pushkar Singh, Co-Founder, a mechanical engineer alumnus from IIT-Kharagpur.

Published on January 22, 2018

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