Authored by Hemanth Chandra, CEO, Pickkup, an
enterprise-focused last mile delivery startup
From making remote working a norm to bringing about a radical
shift in the way consumers shop, COVID 19 is being regarded as a black swan event
for the global economy. Even as traditional businesses took a hit due to the
pandemic-induced lockdown, the changing landscape acted as a major catalyst for
digital transformation across business and delivery models. COVID 19
accelerated the shift towards digitization as dependency on online services
grew exponentially overnight. The Indian population was acquainted with the concept of
last mile delivery or doorstep delivery over the last few years, whether it is
food delivery or shipments from e-commerce platforms. However, the situation
emanating out of the pandemic has given a boost to mass adoption of these services.
Notably, small businesses which make up the backbone of
India’s economy still have limited digital presence. It is estimated that only
20% of small businesses offer online services currently, leaving a large
untapped market and infinite possibilities for the growth of logistics sector.
The demand for last mile delivery services is likely to grow significantly in
the coming years as greater digitization of businesses takes place.
There is already
a surge for on-demand and instant deliveries services across the Indian urban
space. With logistics and delivery service providers brimming with orders, a strong
need has been felt for technology-based instant last mile delivery models that
can not only improve delivery speed but also optimise utilisation of resources,
thereby improving unit economics. In fact, efficient last mile delivery has
become a key determining point as far as customer satisfaction is concerned and
all kinds of businesses are looking to provide last mile delivery.
The on
demand delivery industry is already disrupting traditional markets by adopting
a full cycle approach to three essential components of a delivery experience:
Ordering, pick-up and delivery. This will receive a further boost as
businesses adapt to the COVID induced changes.
The e commerce surge
and emerging need for last mile delivery
Evidently, e commerce was the most notable beneficiary of the
COVID 19 induced transition of the economy. As more people preferred the safety
of home delivery over personal buying, e commerce platforms were flooded with
orders. In India, where a large section of the population had still not adapted
to e-buying, the post COVID period witnessed a rise in first-time-ecommerce-users.
So overwhelming were the initial months of the 2020 lockdown that leading e
commerce platforms such as Big Basket[1],
Amazon[2]
and Grofers had to prioritise orders and request customers to bear with delays.
According to market research company Forrester Research, e commerce sales jumped
by 7-8 per cent in India in 2020. Even though this jump was much less than in
the US or Chinese markets, it does display a trend towards a shifting consumer
behaviour. Growing e-commerce sector is creating more opportunities
in intracity logistics and changing customer preferences with respect to
shopping and delivery. According
to KPMG research, 80% of customers today look for same-day shipping. In fact,
50% of shoppers are actually willing to pay extra money for faster delivery. As
consumers become accustomed to extremely quick delivery experience, offering
shipping options will increasingly become a ‘need rather than a choice’ for retailers.
Efficient last mile
delivery gains importance
“Last mile” as the phrase suggests refers to the final stage
of delivery to the consumer which mostly happens from a point to another within
a city. Often, while inter-city transportation has been efficient, the final
stage delivery remains a challenge. This is where efficient intra city
logistics and last mile delivery services are gaining prominence. Intracity
logistics for enterprises is not just about delivering parcels in 30 minutes.
It is about solving the actual business challenges.
It is about building capabilities to seamlessly execute movement of goods
irrespective of scale and size.
Major e commerce players as well as small businesses are
today looking to improve delivery time and experience as a critical tool to gain
new customers and satisfy existing ones. Hyperlocal players are increasingly
witnessing a rise in express delivery, next day delivery or two day
delivery. Instant on-demand delivery is another relatively new focus area
gaining increasing prominence in recent times. However, executing express deliveries
and on-demand requires highly sophisticated logistics and last mile delivery
capability. The relatively nascent logistics sector in India therefore needs to
grow at a rapid pace to meet the rising needs of a digital economy. Clearly, an
infinite space for last mile delivery services is emerging in India.
Harnessing Technology
to overcome challenges in intra city logistics
Intra-city logistics providers that usually deal with instant
and on-demand delivery requirements have a high degree of commitment to
ensuring deliveries within the same day. This makes the entire chain of
operations subjective to demand variability. Orders may suddenly surge from one
part of the city, requiring quick identification and connectivity with an
available delivery agent. Innovative technology is the bedrock of a system that
efficiently matches the needs of demand and supply to ensure a seamless
function together with optimisation of resources and positive unit economics.
Innovation-focussed startups like
Pickkup are increasingly filling this void by harnessing technological
innovation to create algorithms and systems that optimise the use of resources
to the fullest while ensuring high degree of customer satisfaction. The
potential of the industry is huge, with tech startups solving the logistics
puzzle beautifully.
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