Online shopping portals often make themselves out to be a genie that grants your wishes while all you have to do is rub a credit card and press a few buttons. And while this new wave is tailor-made for the on-the-go kind of crowd that has no time to stand and shop, the current logistics system isn’t equipped to cope and deliver flawlessly, given the unreliable schedules and nomadic lives of this on-the-go target market. A Delhi-based startup found the middle-ground and engineered the perfect solution to ensure easy delivery while still retaining all the feels of online retail therapy.
Son of the owner of a local but well-known printing shop known by the name of 'Friends' in Delhi’s CP area, Amit Sawhney completed his Bachelor’s from the School of Imaging Arts & Science at Rochester Institute of Technology, Rochester, New York, majoring in Printing Management.
After working for a little over a year in a company that made workflow solutions for the print industry, Amit moved back to India in 1999. After 2003, their traditional quick print business went on to become India’s largest transaction print and mail service provider, with four large industrial facilities in the country, at Gurgaon, Navi Mumbai, Kolkata and Chennai.
A smart solution
While their first business was booming, Amit noticed a trend developing - the physical mail that they produced was declining, and what was growing was the parcel volumes with the ascent of e-commerce. “We wanted a part in that ever-growing space. One of the biggest complexities and challenges in e-commerce, especially in poorly built out infrastructure countries like India is last-mile delivery, which is bound to get worse as volumes grow further,”Amit explains.
Smartbox's solution addresses that by first eliminating ‘last mile’ from the equation and, secondly, automating the consumer experience of accepting deliveries and making cash-on-delivery (CoD) cashless.
The company does that by providing a round-the-clock address or destination, or a ‘terminal’, if you may, where parcels can be delivered and withdrawn by the end consumer. This terminal is a completely automated machine, and works like an ATM or a locker. The online shopper does not have to physically co-ordinate with a courier person to accept deliveries, thus sorting out the issue of receiving deliveries when they are not at home. If they select the ‘Smartbox’ option while checking out, the parcel can be delivered to one of their terminals around the city by the courier company, and the shopper picks up the same.
Logistics companies also become a lot more efficient when using this solution. On an average, one courier boy can make 30-35 attempts and 25-30 deliveries in a day. “We increase that efficiency by 10x because now every attempt is a successful delivery, with our type of ‘milk run’ delivery format where their delivery person has to go to fixed spots in a city and drop off parcels on a machine without calling the recipient or waiting for them or for the cash transaction to happen etc. So the same delivery boy can now do 300-400 deliveries per day.”
Most of Delhi-based Smartbox’s customers are e-commerce companies, 70 percent of which are based in Delhi NCR.
The project was in the making for two-and-a-half years before they went live in October 2015. Smartbox has a multi-dimensional revenue model - monetising logistics, payments, advertising, and subscriptions. It has established 50 terminals at prominent and frequented locations in Delhi NCR, like metro stations, each with a capacity of 52 parcels.
The team expects to touch 5,000 transactions a day from the coming quarter, and going up to 30,000 transactions a day within a year - taking their monthly revenues to approximately Rs 4 crore. “We intend to cover the top eight metros of the country in this financial yearand the remaining tiers of the countrynext year,” says Amit. So far, Smartbox has tied up with Shopclues and Oriflame for their deliveries.
As of now, Ravi Gururaj’s Qikpod is Smartbox’s closest competitor, offering the same facility in Bengaluru, with $9 million in funding from Accel Partners, Flipkart, Delhivery and Foxconn Mobile. There are similar business models that exist in other markets, especially Europe. Some run a network like this by the name of 'InPost' and others have their captive networks for their own businesses such as Amazon Lockers or DHL’s PackStation.
Bootstrapped so far, the startup is actively looking at raising funds, for which iBanker is already working with them.
On the one hand, predictions for 'd-commerce'— that is 'discovery' commerce based on emotionally-driven impulsive purchases —being the next big wave in e-commerce are finding more and more takers. Forecasts are all for deliveries hitting the one-million-deliveries-a-day mark by 2020. On the other hand, 78 percent of American shoppers want to be offered the convenience of in-store pickup, after selecting and booking their products online at Big Box stores, as opposed to waiting for the product to get shipped to them. Both trends converge at the same solution – optimising the time of the overburdened delivery person, and having the consumers chip in, in the process. Innovations like Smartbox offer shoppers the same convenience of proximity that big box stores offer them, therefore nudging them to meet the logistics chain halfway and cover the last mile.