While all e-commerce supporting services like payment, marketing, technology among others have attracted venture capital attention, logistics has not been able to draw institutional investor’s interest. Recently, we wrote about Chhotu’s shutdown as it failed to raise a further round to keep afloat.
Unlike other supporting services for e-commerce, logistics is an overlooked domain as we do not see more than two or three startups evangelizing over the last five years. Nevertheless, despite entry barriers and capital crunch in the segment, Gurgaon-based e-commerce supply-chain solution, Delhivery, has managed to grow with full steam.
Started in 2011 with five co-founders and a handful of delivery boys, the startup has now over 2500 plus employees who service a 600-client base across express and fulfillment logistics. “Over the past three years, we have evolved into a complete supply-chain solutions providing core e-commerce technology and logistics services for everyone in the ecosystem,” says Sahil Barua, Co-founder and CEO, Delhivery.
Delhivery offers tailor-made solutions for brick and mortar retailers and small sellers, including boutique businesses. After raising its series B from Times Internet Ltd and Nexus Venture Partners, the startup had spruced up all its divisions. “We set up fulfillment in three cities and increased fulfillment space from 10,000 sq.ft. in 2012 to 60,000 sq. ft,” adds Sahil. Earlier in 2013, Delhivery had acquired offline cash collection network of Gharpay for an undisclosed amount.
Brainchild of five co-founders -- Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan and Kapil Bharati -- Delhivery started as the last mile logistics service in Gurgaon and later extended to NCR region. “We followed gradual expansion strategy initially as logistics is a capital intensive play,” points out Mohit. At present, it has reached over 1800 pin codes and delivers close to 25,000 shipments across the country.
“When we started, larger logistics setups operated on models designed fundamentally for different industries. Hence, they were stuck with legacy systems and the inability to truly understand the evolving consumer needs of e-commerce,” says Mohit.
On the pricing front, Delhivery charges Rs. 30-35 to pick and deliver a 500 gm. packet in NCR, Rs. 40-45 for transferring a packet (same weight) to metro cities and Rs. 50 for tier-2 and tier-3 cities. When it comes to reverse logistics, the startup charges in tune of 1.2X to 1.5X of forward logistics.
Towards the end of last year, Delhivery piloted successful robotics technology at one of its fulfillment centers which it plans to introduce in other centers for improvising efficiency metrics.
Moving forward, Delhivery plans to expand its fulfillment and express shipping network to over 15 and 250 cities respectively by the end of 2014. “We will also roll out a number of new technology products spanning across processes like order management and global inventory management, including warehouse and transportation management systems,” says Sahil.
Besides these, the company also plans to extend its tool-kit which includes omni-channel services, customer/channel analytics, ship-smart and COMS.