Insights

Last Mile eCommerce Headaches in India

Associate Executive, Business Development, India
Valtech

October 28, 2015

India has been one of the late immigrants to the eCommerce world and is still struggling to solve several eCommerce challenges. Last mile delivery constitutes one of the major challenges apart from those associated with cultural, linguistic, and infrastructural issues in India.

Last mile delivery constitutes the final stage in the supply chain when a customer receives the order. With the overwhelming buying power in India and multitude of packages for delivery every day, accompanied by huge traffic snarls, last mile delivery becomes a significant challenge in India. Many reports reckon that the most difficult part in eCommerce is to find viable options to make home deliveries in the stipulated timeframe envisaging crowded streets & unfavorable postal services in India. Pin codes of operations & locations play a critical role in the last-mile delivery model. The entire operation of converting an inventory to a package and then transporting the package efficiently through the supply chain followed by replenishing fulfilment plays a crucial role in last mile delivery & has to be done with precision & without delay.

Forrester predicts online buyers to reach $125 million by 2019 and Morgan Stanley says that the eCommerce sales will hit $100 billion by 2020 in India alone. Clearly, eCommerce in India is poised to grow at a phenomenal rate. Given the current scenario, the eCommerce explosion has created a common platform for consumers across India to attract more consumers to shop online. This burgeon growth has resulted in a pressing need to create a compelling ecosystem that offers a secure & reliable delivery system capable of delivering almost anything in the fastest time span.

Several eCommerce giants such as Flipkart and Jabong have their own logistics delivery network. For example, Flipkart has e-kart and Jabong has GoJavas (spun-off but still works for Jabong) to handle a significant portion of their total eCommerce shipments. Added to that, Flipkart has also launched a crowd-sourcing delivery option to connect local sellers and buyers to significantly reduce the time to deliver an order. Similarly, Amazon launched their ‘Amazon Transportation Services Private Limited’ to manage the last mile delivery craziness in India. Snapdeal which was relying completely on third-party logistics to drive the last minute delivery to its customers has recently entered into a partnership with GoJavas to strengthen their supply chain – the backbone for a successful eCommerce ecosystem.

To summarize, it appears that India is still struggling to solve some of the eCommerce challenges, logistics being one of them. Buyer expectations are increasing boundlessly. Therefore, for new eCommerce adopters, the need to evaluate robust logistics services is paramount if they want to succeed in the eCommerce game. For a developing country such as India, with its vibrant economy, varied income standards, and changing demographics, it is important to understand that efficient delivery services will largely contribute to the willingness of consumers to shop online in future.