Why these engineering grads went from coding for ecommerce companies to a logistics startup
In 2015 and 2016, when the ecommerce boom hit India, there was growing demand for a better supply chain system to manage high volumes of shipments without compromising the quality of service.
During this time, Naomi Leon and Aaqyl Chagla, then pursuing engineering at St Francis Institute of Technology, Mumbai, realised they were not up for cookie-cutter placements and jobs. The duo decided to start Styledge, which provided coding services for ecommerce companies.
While working for these companies, the co-founders realised that supply chain and shipments were a major concern. It led them to start Mumbai-based logistics startup Rapid Delivery in August 2016. It is a solution that seamlessly integrates supply chain processes and reduces non-delivery ratio, delivering end-to-end courier solutions to ecommerce players.
“We work with ecommerce brands, retail outlets, and corporates to deliver products across the country. Our services include cash on delivery, reverse pickups, and next-day deliveries,” says Naomi, 27.
What does the platform do?
Rapid Delivery has a tech platform where sellers can book shipments and schedule pickups. The riders/vans pick up the shipments and connected to delivery locations while providing the seller real-time visibility of the shipment.
The platform directly integrates with Unicommerce, Open Cart, Shopify, Woo Commerce, and others.
As a fully manpower-driven company, last-mile agents are the champions and lifeline of Rapid Delivery. But managing and scaling them is a challenge, especially if the team doesn’t have accurate projections from enterprise customers.
“We are constantly working towards bridging this gap, so we can optimise our field agents and company cashflow,” Naomi says.
Rapid Delivery’s direct cost is the transportation cost of goods, along with doorstep delivery cost, which includes transport, manpower, and fuels. The margins for delivery depend on the efficiency of manpower and vehicles. Currently, the team claims to have operating margins of 19 percent and aims to touch 40 percent by FY21.
Naomi says everyone in the courier industry is today focused on adding new clients. However, she feels the most important thing for any ecommerce company to survive is to have shipments delivered on time. The RTOs, shipments returned undelivered back to the seller, need to reduce.
Rapid Delivery works on lowering this number and increasing the delivery percentage, so sellers can work on increasing orders, rather than worrying about shipments being returned after “fake attempts” by last-mile agents.
“We ensure the necessary checks to verify these remarks by our field agents, through our robust technology along with manual checks by respective managers. When shipments are delivered, ecommerce companies don’t have to bear losses of paying courier charges for returns, which one would generally pay if the shipments are getting returned. Their revenue targets are met as the product is delivered and the lifecycle of the product is short because it is delivered on the first go,” Naomi explains.
Sellers pays Rapid Delivery for all products shipped through their platform. The logistics startup’s key clients include Netmeds, Seniority, Souled Store, Medlife, Health Kart, and Mirraw.
COVID-19 and the way forward
COVID-19 created a high demand for Rapid Delivery’s services as people desisted from stepping out of their homes. The delivery of essentials was the most crucial and the team started a marketplace under their brand, essential.rapidd.co. It works as an aggregator for delivery of essentials like grocery and medicines.
“With need and demand, we underwent significant upgrades in our technology and operations. We started offering systematic date and time tracking of shipments through unique features like 'live- tracking' and 'contactless delivery'. These were introduced to address the challenges in last-mile delivery and ensure safety amid COVID-19,” Naomi says.
She says Tata Nutrikorner, the content-to-commerce platform from Tata Consumer Products Limited’s Food division, has onboarded Rapid Delivery as a logistical partner.
Products of essential nature from iconic brands such as Tata Salt, Tata Sampann, and Tata Tea from the TCPL stable will now be delivered safely to homes across select cities. The Rapid Delivery team is trained to follow strict precautionary measures to ensure safety from the pandemic.
Competition and the future
The logistics sector in India is expected to touch $215 billion by the end of 2020, predicts India Brand Equity Foundation (IBEF). Employing more than 40 million people in India at the moment, the sector is expected to be the largest job creator in the country by 2022, according to several market reports.
Some of the other delivery-focused players in the space include -Rapido, Delhivery, Rivigo, Xpressbees, Wow Express, and Lets Transport.
But Rapid Delivery is confident of rapid growth.
“Rapid Delivery is the only courier company that did not spike rates to ease delivery challenges during the lockdown. We have projected 280 percent growth in turnover from last financial year in spite of COVID-19. We have hired more than 200 employees, and expect more shipments and a higher turnover this year,” Naomi says.
The team has raised seed rounds of Rs 40 lakh and Rs 3 crore. In the third year of operations, the team claims to have made revenues of Rs 225 lakh.
Naomi says the team’s present focus areas include growing their courier presence beyond major metro cities.
“Our future focus also includes creating a streamlined system for efficient supply chain management to reduce cost and processing time for companies and ourselves,” Naomi says.
Edited by Teja Lele Desai