DotZot, the e-commerce logistics company in which DTDC has a majority stake, is set to offer online shoppers an option to collect their orders from DTDC Pickup Shops near their homes or offices and drop off returns at these centres.
The e-commerce logistics company will launch this service in 10 cites, including the metros and centres like Ahmedabad and Jaipur, in January 2016. The company has entered into a partnership with France’s parcel pickup and drop company Pickup Services.
Pickup, founded in 2000, is part of GeoPost Group, the express logistics subsidiary of Le Groupe La Poste. GeoPost owns a 40 per cent stake in DTDC. Pickup Services offers the IT backbone that tracks the movement of packages to and from 22,000 parcel shops in Europe, across countries like France, Germany, UK, Switzerland and Portugal. This network handles over 30 million parcels annually.
The service could potentially reduce logistics costs of e-commerce companies by 1 per cent, said Sanjiv Kathuria, Co-founder and CEO of DotZot. “The e-commerce growth cannot be sustained only by the current mode of delivery,” said Sanjiv. He said the number of delivery boys needed would be in the couple of millions by 2020, considering the many new formats that are emerging, like hyperlocal. Also, as e-commerce reaches even the smallest of towns, thanks to the proliferation of mobile phones, cost of servicing far-flung towns will go up.
“If the e-commerce companies continue to follow the same logistics process as they are right now, cost will go up by 2 per cent by 2020. So the net impact of such a Pickup and Drop off (PUDO) service will reduce costs by 3 per cent,” said Sanjiv, adding that compared to home delivery the PUDO delivery will be 15% cheaper for DotZot’s clients.
Under PUDO, when a customer places an order online he or she can opt for the delivery centre instead of their own address. When the package reaches the delivery centre, the store scans the package, which results in an automated text message being sent to the customer, and the customer can pick up the product. Last year, fashion e-tailer Jabong had piloted a similar service, where customers could pickup parcels from petrol pumps and coffee shops. DotZot too will expand the service to non-DTDC stores later.
“You need to have perfect control of the entire chain from shipper to end-customer and that is what our IT allows,” said Diego Magdelénat, Co-founder and CEO of Pickup Services. Diego said India is a very important new market for Pickup. “We want to develop three new areas—India, Africa and South America. We want to roll out 150,000 shops by 2020 and India will contribute 20 per cent.”
DotZot, which is at present doing over 35,000 shipments a day, will expand the service to 10 more cities by March and to 125 cities and towns by end of 2016.
The Indian e-commerce industry is expected to grow to $80 billion by 2020, according to a report by Snapdeal and KPMG. It is expected to expand further to reach $300 billion by 2030. To support such growth, which will be driven primarily by consumers from small cities and towns, logistics companies will need an army of delivery staff. Despite India’s massive population finding the right delivery staff will not be easy. Already there have been instances of companies facing problems with their delivery boys. In April, a section of Flipkart’s and Myntra’s delivery staff had gone on strike. Recently delivery staff at hyperlocal logistics company Roadrunnr had vandalised its office, protesting changes in their compensation structure. DotZot’s PUDO initiative could not be timelier. More such innovations are needed, and soon, to make e-commerce logistics more efficient and cost-effective.