Ecommerce enablement platform resembles a software company more than a traditional fulfilment or logistics company, Co-founder and CEO Saahil Goel said in an exclusive chat with Shradha Sharma, Founder and CEO of YourStory.
The logistic solution provider for ecommerce businesses saw its revenue grow 80% YoY, earning Rs 1,089 crore from operations in FY23 compared with Rs 611 crore in the previous fiscal. The revenue nearly doubled driven by growth in business, Goel said, adding that the investments in the past year are now reflected in its financials.
From starting as an ecommerce marketplace “inspired by Shopify” to later pivoting to become a leading logistics solutions provider for ecommerce businesses in India, Shiprocket has come a long way.
Reflecting on the company’s journey, Goel remarked, “In India, to have an ecosystem play, the ecosystem has to be there. When we narrowed it down to shipping, it was largely because we realised that the components themselves were not there.”
He added, “So, rather than trying to build an application, we thought let us build the ecosystem components so that we can power commerce and commerce can take any shape.”
Goel highlighted the importance of partnering with best-in-class entities in various sectors, including collaborations with premier lenders for capital services, and leading payment gateways for payment solutions.
“We failed several times and then we learned that the way to do it is using the best in class ecosystem providers and not trying to verticalise everything ourselves,” he noted.
Shiprocket has established more than 200 partnerships, negotiating contracts, implementing standard operating procedures, and onboarding these partners onto its network for about 100,000 merchants who work with the platform.
It provides merchants with the tools and support needed for generating demand, processing payments, achieving improved conversion rates, managing payment methods like COD and UPI, offering warehousing solutions, and facilitating last-mile delivery for shipping.
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Moreover, it has driven its business expansion through inorganic stitch-ups, acquiring five companies over the last 18 months. These include ROCKETBOX (cargo shipping business), Glaucus (supply chain management platform), Wigzo (marketing automation platform), Pickrr (logistics aggregator), and Omuni (Arvind Internet’s retail enablement business).
“It has been a very deliberate journey to do these acquisitions, which would have taken us maybe 3X the time to do it ourselves,” Shiprocket chief said.
Last month, Shiprocket secured $11 million in additional funding in an extended Series E round from McKinsey and facilitated through its investment entity AFOS.
Regarding funding, Goel mentioned that the company has a larger partnership with McKinsey, which aids the firm in driving growth agendas, especially in foreign markets and for merchant expansion.
“For Indian sellers today, having American buyers is somewhat a matter of pride,” he said, adding that there is a huge opportunity for direct brands in the region.
Shiprocket continues to be “very excited” with the promise that India has for platforms like it, Goel said, adding that the ecommerce enablement platform is working on providing an alternative sales channel for merchants, potentially allowing them to reduce their commissions by half compared to what they pay on big marketplaces.
He explained that the real problem lies in supply not reaching the US.
For instance, in China, platforms like wish.com and AliExpress list Chinese inventory in the US, allowing American buyers to purchase items, with single items delivered to the US within just seven days in an economical and timely manner. This is the concept Shiprocket aims to replicate for India, according to Goel.
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Startup ecosystem
Speaking about the startup ecosystem, Goel remarked, “When things are going up, it is all great; but when things are going down, it often feels like everyone is out to get you. I find it to be a rather hypocritical sentiment at times.”
Goel elaborated that the Indian landscape wouldn’t have been the same if certain startups didn’t contribute to innovation regardless of their financial performance. “We should think hard in terms of what’s happening here and what is the long-term potential and movement that’s being driven here,” he added.
The pivot to Shiprocket was a long-term play, not a quick two-year journey with a goal of 10X or 20X returns, Goel noted.
Edited by Kanishk Singh
