Growth Of Ecommence Logistics Company In India

 Ecommerce logistics, or e-logistics, represents the logistics of internet sales. Ecommerce logistics include many aspects like product handling, packaging, billing, labeling, inventory management, warehousing, transportation, payment, product return and exchange, and many more things. An ecommerce logistics company deals with the management of all the different aspects involved in ecommerce logistics.  With Indian ecommerce logistics to be worth ₹492 bn by 2025 with 23% CAGR, managing logistics is the greatest challenge for any ecommerce company especially in a country like India with a vast territory. 

 The Indian ecommerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. But few other factors which are promoting ecommerce in India are:

 

· Convenience

· Ease of transactions

· Anytime, anywhere shopping

· Personalized Customization

· Advancements in Technology

 

Indian ecommerce logistics has seen exponential growth due to the growing ecommerce industry, investment in infrastructure, last-mile connectivity, and emerging technologies that are streamlining the logistics landscape in India.

 

One of the top logistics companies in India, Safexpress, is a market leader in supply chain and logistics. They offer solutions ranging from warehousing to timely distribution of goods across PAN-India.  Safexpress B2C specializes in ecommerce logistics and supply chain management. Safexpress offers tech-enabled, real-time data capturing solutions to facilitate time-sensitive, hassle-free, safe warehousing and inter-modal express distribution through its enviable surface and SafeAir infrastructure across India.  Safexpress ensures all ecommerce logistics solutions are aligned with clients’ specific business requirements.

 

Reasons for increasing demand for Ecommerce Logistics

 

Change in customer shopping patterns, increasing requirement of fast delivery services, and usage of technology to improve the customer experience have played a major role in the growth of ecommerce logistics.

 

· Rise in demand from Tier II and below cities

 

Ecommerce market penetration is mostly revolving around metro and tier I cities, but a change in shopping patterns of tier II and below cities is seen due to internet availability and mobile technology. With cheap data plans, increased usage of smartphones people are increasingly attracted to purchasing online. Increasing demand for products from these areas would require demand centers being set up to cater to this section thereby adding to the growth of ecommerce logistics.

 

· Technological Advancements

The adoption of new technological innovations has been extremely rapid in India to meet higher consumer expectations. To keep pace with digital commerce, technology has helped to revolutionize the ecommerce supply chain industry. Technologies such as IoT, advanced algorithms, data analytics, artificial intelligence (AI), and automation are emerging to streamline the ecommerce logistic operations of the companies.

 

· Government Regulations

 

Supportive government initiatives to boost infrastructure development and implantation of GST have improved the delivery of ecommerce goods across the country. With the government of India’s push towards digital initiatives to accelerate outreach and adoption of digital wallets, ecommerce sales will increase.

 

· Expansion of Supply Chain Network

Increasing accessibility to technology has ecommerce logistic companies focusing on establishing new fulfillment centers near the end consumers to increase delivery speed and cater to larger parcel sizes. With Tier II and beyond cities driving the growth, several logistics company in India is looking at expanding their network.

 

In Conclusion

 

The ecommerce industry in India is flourishing due to internet penetration and mobile technology. Logistics company in India is evolving rapidly with the changing business requirements to cater to this enormous industry. 

Reverse Logistics Process in E-commerce Industry

KPMG in a recent study (Ecommerce Retail Logistics in India; 2018) estimated that return constitutes up to 20% of total transactions in ecommerce logistics with Cash on Delivery (COD) orders going up to 40%. With online shopping slowly gaining currency in Tier II & III cities and bulk of orders expected to being COD-based, return to origin is expected to go further up. In the United States, return forms around 10% of total transactions (US National Retail Federation; 2018). 

Clearly, lack of standardization, impulse buying and sub-standard products are the major reasons for a picture like this. For a seller though, return up to 40% is a nightmare, no less. Apart from the cost of logistics, expenses incurred in rebranding, refurbishing, resale or simply disposal of return goods may further escalate the total cost. Embedding the cost of shipping, including 40% of expected return, will make the product commercially unviable and competition would ensure that seller doesn’t resort to this. Meantime, the shipper will be left wobbling.

Reverse logistics – the process of transporting goods back from the customer to the business, including for replacement, is integral to all businesses. It has been there for years, though for businesses and logistics companies it has become sort of a headache with the rise in online retailing, cross-channel returns and return of bulky goods like ATM machines, V-sats, furniture, etc. Reverse logistics is costly and labour intensive. 

It means spending time and resources on a product that’s no longer an asset. It is also unpredictable and complicated and puts fulfillment centres and warehouses under tremendous pressure. Returned goods lying indefinitely with logistics companies for the lack of a clearly laid down procedural roadmap of delivery, is a common sight. Clearly, what is unproductive is burdensome and little effort is made to address this systemic malaise.

Reverse logistics is a reality and importance that both manufacturers and logistics companies must accord to reverse logistics should be lost on no one. Apart from the usual stuffs like strengthening products and packaging, employing novel consumer retention techniques, discouraging impulse buying, etc., manufacturers must also engage the logistics companies for developing a clear-cut framework of return logistics management. For one, make the process of return management easier for consumers. 

Once a consumer initiates for return, auto-ticketing should ensure immediate response and a hassle-free pickup. Two, long-haul return process including return delivery should, to the extent possible, be the exact opposite of the forward movement. Three, ‘Customer is the king’ and in cases of return, customer satisfaction is ensured with return delivery only. Primacy need to be accorded to consumer satisfaction for, a satisfied consumer is also a loyal consumer. Four, in case of online retail, adopting a fully-integrated ecommerce platform will reduce the hassles of return management to a great extent. 

This can be done by encouraging consumers to choose replacement in applicable situations. Five, determining, sorting and categorizing return products for further action like replacement, repair, resale, refurbish, recycle or scrap ward; in every probability, the salvage value once acted upon quickly could still be higher. And six, keep inventory from piling up in all the scenarios. Inventory stuck is a collateral damage.

Obviously, businesses resell, reuse and recycle returned products. In a study published earlier, Gartner Research indicated that nearly half of returned goods are resold at their full price. Furthermore, there is value in finding the best option for returned items like discount sale. Needless to say, effective reverse  logistics can keep down any storage and distribution costs. In practice, there are two models of reverse logistics is visible. Some businesses separate their forward and reverse logistics while others find value in combining them. The relative success of combined or dichotomized models however depends greatly on experience and volume of return goods. For both the cases though, time is of essence.

Challenges Faced by Ecommerce Logistics Company in India

Ecommerce has become the preferred shopping method among customers and is gaining increasing popularity. The Indian Ecommerce industry has been on an upward growth trajectory and is expected to become the second-largest Ecommerce market in the world by 2034. 

An ecommerce logistics company needs management of inventory, warehousing, packaging, labeling, billing, shipping, payment collection, handling returns, and exchange. Ecommerce logistics involves problems like increasing expectations for a short delivery time, real-time tracking, and easy returns, making it a constantly evolving challenge to stay ahead in the game.

 

Any logistics company in India needs to provide efficient fulfillment services and fast shipping to meet customer needs and expectations. India is a country with a large geographical presence. To cater to high demands, effective inventory management with faster, cheaper shipping, implementing technology is the key to a successful ecommerce logistics strategy. Ecommerce logistics has become an essential part of supply chain management and has emerged as a highly specialized service as a reason.

 

Logistic challenges faced by the ecommerce industry

 

Ecommerce fulfillment requires speed and efficiency, but there are a few challenges that make it difficult but not impossible to overcome.

 

·         Poor Infrastructure

 

India’s logistic infrastructure is insufficient and ill-equipped to handle road, air, or sea transit. A lack of proper infrastructure leads to inefficiency, longer transit times, higher logistics costs, and returns. With the Indian Government taking a keen initiative to bring down overall logistics costs, infrastructure streamlining investments are on the rise. With proper infrastructure operational efficiency, cost control would be possible.

 

·         Adoption of New Technology 

 

With most companies yet to embrace new technology, tracking and handling returns is a major headache for logistics companies. New technologies are enabling process improvements with their capabilities to analyze real-time information for better decision-making. 

These technologies integrate machine learning and AI-based solutions for route navigation, driver allotment, and much more, which enables companies to save on total operational costs, reduce supply cycle time and improve on the last-mile. By using data-driven technologies such as Big Data, IoT, sensor technologies, and machine learning insights, operational efficiency can be improved.

 

·         Absence of Effective Real-Time Delivery Tracking System

Real-time delivery tracking would help companies and customers keep track of the status of the package. This tracking would allow companies to share updates on deliveries in real-time. Current real-time location systems are based on wireless technologies, such as Wi-Fi, Bluetooth, ultra-wideband, RFID, and GPS. 

With the help of these systems, real-time updates can be provided to keep track of the locations and statuses of drivers. Last-mile tracking provides complete order transparency to the customers. Tracking helps to solve internal delivery challenges and communicate critical information to guide the delivery fleet in case of heavy traffic or poor weather conditions.

 ·         Inability to Handle Product Returns

 

Logistics for the return of products purchased on ecommerce websites remains under-developed and creates significant issues for consumers as well as logistic partners. The lack of proper product-return processes can lead to customer and revenue loss.

 

Safexpress, a market leader in supply chain and logistics, offers solutions from warehousing to timely distribution of goods across India. Safexpress B2C specializes in ecommerce logistics and supply chain management, offering strong, tech-enabled, real-time data capturing solutions to facilitate time-sensitive, hassle-free, safe warehousing and inter-modal express distribution through its enviable surface and SafeAir infrastructure across India.

 

In Conclusion

 

The ecommerce market has become highly competitive with customers having more control over the delivery process than ever before. In such a scenario, the main aim of an ecommerce logistics company would be to provide a logistics solution that would deliver parcels faster, safer, and accurately.