When Amazon introduced its Prime service back in 2005, little did one know that it had set a new trend in the online shopping universe – convenience. Fast forward to today, delivery speed has become like a battleground of sorts in the last-mile logistics business. With changing consumer behaviour and the need for instant gratification, same-day delivery is becoming a must-have offering for brands that want to stay competitive, let alone grow.
And with smaller Indian cities now accounting for a larger pie of e-commerce sales, logistics companies are looking at sustainable last mile delivery mechanisms to fulfil the growing demand from Tier II and Tier III cities in India. “Volume share of these smaller cities in India’s e-commerce market increased to 46 percent in Q4CY20 from 32 percent YoY. Also, online spending per customer in Tier II and Tier III cities has also improved as these cities held a 43 percent share of the e-commerce sales value last quarter, up from 26 percent YoY,” read a 2021 research report by ICICI Securities.
“Though same-day delivery seemed slightly more appealing to urban millennials, Tier II and Tier III cities have immense untapped potential for same-day delivery, especially considering the government focus on infrastructure upgrades for Tier II, Tier III and rural areas,” said Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG India.
Same-day delivery woes
For retailers, ensuring a smooth and satisfactory last-mile delivery – the final leg of the journey where a product lands in a consumer’s hands – is always critical as it helps to engage and retain consumers. But truth to be told, availability of superior last-mile delivery resources has always been a challenge. A significant number of vehicles and drivers in last-mile delivery operations work on-demand. And same-day delivery requirements have amplified those challenges.
“Speed and delivery cycle, with a perfect balance are crucial factors in same-day delivery business models. A strong network chain of local warehouses coupled with technology-based interventions to streamline the picking and packing processes could be crucial for last-mile deliveries. Further, use of tracking, traceability, and delivery routers etc could help prevent unnecessary hindrances during the last-mile delivery. Apart from this, product availability and the attitude of delivery personnel are also key factors playing an integral role, which cannot be ignored,” believes Harsha.
Rising to the challenge
Looking to address such time-critical challenges, logistics players like Borzo (erstwhile WeFast) are equipping and empowering SMEs with fast, precise, and same-day delivery serving all the pin codes within a particular city. Currently, Borzo serves 14 Indian cities – Mumbai, Delhi/NCR, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Pune, Surat, Jaipur, Goa, Indore, Bhopal, and Chandigarh with a network of over 18,000 courier partners.
Borzo’s technology ecosystem for SMEs enable them to minimise warehouse cost challenges as orders are dispatched from shelf quickly, generate repeat orders due to enriching customer experience, and provide a competitive edge, which allows businesses with a free-hand to focus solely on fulfilling demand. Furthermore, in addition to two-wheeler fleet partners, Borzo is now integrating truck partners to enable volumetric deliveries.
“Local businesses have to equip themselves to fulfil the growing same-day delivery demand by being fast, precise, and cost-efficient. Cities are not uniform, routes are not uniform, types of deliveries are different hence SMEs require strong logistics support to enable their growth and push economic advancement. Our initiatives will precisely do that by adding value to business operations,” said Devesh Gangal, Country Marketing Manager, Borzo India.
Some of Borzo’s SME clientele have been vouching for the superior service offered by the logistics company. Dr Pravin Jain, MD of Bengaluru-based HomoeoCARE said, “Our homoeopathic clinic was facing a significant challenge with our medicine distribution. Especially during the pandemic, when we were facing an issue of delivering our medicine to our patients, we discovered Borzo and saw significant improvement right away. After using this platform, we have seen improvement in our service as people were more comfortable getting medicines at our doorstep.”
Maharashtra-based organic farming startup Two Brothers Organic Farms (TBOF), which produces and supplies a variety of organically grown food products to different parts of the country and beyond has been using Borzo’s services for a while now. “We are now equipped to handle seasonal and occasional spikes in deliveries along with stable uptick in orders. Cost may be similar to our erstwhile delivery staff; however, scalability compensates for it and delivery speed has definitely improved,” said a TBOF representative.
Ensuring successful delivery models
A great last-mile delivery service that delights consumers will go a long way towards attracting and retaining customers. Given the faster-time-to-market and the pent-up demand in the economy, especially from Tier II and Tier III cities, it is an opportune time for logistics companies and SMEs to capitalise on technology and create a conducive environment for e-commerce.
Small business owners are now making necessary changes to the way they operate, and also the way they deal with their customers online in order to survive in the burgeoning e-commerce space. Companies are realising the importance of having a real-time pulse of the market and are investing in warehousing and logistics facilities in smaller cities.
Given the thin margin-high volume game, it is important for delivery companies to understand the complexity of operations and work to drive efficiencies across all processes. As we transition to an omni-channel market, a successful delivery model will have to be one that is backed by strong logistics and technology infrastructure, combined with top-notch execution capabilities.