E-commerce logistics has been growing in sync with the online retail industry in the country. It is estimated that online retail will be an USD 18-billion industry in India in 2018 and e-commerce logistics will be a USD two-billion industry in 2019.
In the logistics segment, companies have been experimenting and bringing new methods and technology to make the process smoother. Logistics is always a sub-segment in e-commerce and fraught with inefficiency, but Shipdesk claims it is all about efficiency of logistics through technology.
Launched in December 2014 by Lipjo Joseph and Sree Krishna BV, Shipdesk is a logistics marketplace providing online merchants with a cloud-based shipping solution. It’s using technology to aggregate demand and services on a real-time basis.
“When an online merchant makes Shipdesk its partner, all the information regarding the online orders placed with the online merchant is made available in their cloud and they immediately dispatch their team for shipping. It simplifies shipping and accelerates profits for merchants,” says Lipjo, adding that they offer the cheapest shipping rates..An easy plug-in integrates with marketplaces and e-commerce platforms to allow order, tracking and fulfillment data to populate in real time across all systems. This solution helps companies save time and money on shipping while reducing postal errors and keeping buyers informed, yielding loyalty and better seller feedback.
The platform claims to have more than 550 users and the number is increasing with around 150 merchants being added every month. Its clients include marketplaces like Zingohub, Frekart, Budli.in, among others and e-commerce sites such as Dailycatcher, Nivysfashion, Kamalsbotique, Zarasbotiques and online sellers who sell their products in various online channels. The company has been growing at the rate of 40 percent month-on-month.
An investment of around Rs one crore has been made into the venture. The capital was spent mostly on resources which includes sales, marketing and technology. Its focus is presently on online resellers and it would be addressing the SME segment soon.
The platform works on two revenue models, namely margin on shipments and subscription revenue. “So far, our annualised revenue has reached more than Rs one crore as we are yet to complete a year,” says Lipjo.
Challenges and growth prospect
Capacity, lack of uniform demand and inefficiency are some of the major challenges in the logistics industry. However, optimisation and reducing manual intervention can solve many of the problems. “We are continuously investing in these areas and our growth adds credibility to the solution,” says Lipjo.
On growth prospect, he adds there are more than 10 lakh online sellers in India and each is a potential market for Shipdesk. This solution can be expanded beyond the country in other geographies. Besides, there is huge untapped SME segment where unorganised logistics players play a big role. All these markets can be tapped for the growth.
Market and competition
According to a recent logistics report by Singhi Advisors, a city-based boutique investment bank that focusses on deals on the space, the logistics industry has been growing at a CAGR of over 16 per cent over the last five years, despite it being highly fragmented with organised players comprising only six per cent. Globally, the report says the logistics industry was a whopping USD four-trillion giant in 2013, representing 10 per cent of the global GDP.
The players in the segment includes logistics companies like Fedex, Bluedart, Delhivery, Ecom Express etc., marketplace logistics companies like eKart, Gojavas, among others and many localised courier companies.
On competition, Lipjo says that since this market is evolving there is room for every competition. The growth of this industry ensures that each player needs to pick his/her core area and works towards improving the same. He has a roadmap to address these challenges and any new competition would make this industry more stable.
The platform has recently come out with mobile app, and analytics will be playing a big role in its product roadmap.