Ecom Express woos D2C brands, beauty retailers with fast deliveries

There has been a boom in the Direct-to-Consumer (D2C) space. With a number of brands and products now in the market, there has been an increase in demand for priority shipping–an opportunity most ecommerce logistics companies are looking to tap into. 

Among them is Ecom Express, which has launched three new services including Same Day Delivery (SDD), Same Day Delivery+ (SDD+) and Next Day Delivery (NDD) to fulfill these demands. 

A month ago, the company also launched its ExpressPlus (EXS+) delivery which includes air and surface transport to deliver shipments across pin codes within 48 hours to 72 hours, with a lowered turnaround time of nearly 50%. 

“We are trying to create a differentiated product which typically has a lot of buy-in from the other part of the market,” Dipanjan Banerjee, Chief Business Officer at Ecom Express told YourStory.”If you ask me what percentage of people (ecommerce entities) use air today versus a deferred delivery, the percentage would be around 7% to 10% of overall ecommerce goods sold in a particular day. That is a sizeable market”. 

Nearly 60% of the overall number of ecommerce orders are generated by value-commerce players like Meesho, non-grocery orders from Jio Mart and Flipkart-backed Shopsy.

“D2C brands, as well as players in categories like beauty and personal care and fashion are looking at expedited delivery,” said Ashish Sikka, Chief Strategy Officer at Ecom Express.

The recently launched suite of products by Ecom Express will offer faster deliveries, thus reducing returns. The SDD service will offer guaranteed same-day deliveries in top cities and customised cut-off time for ordering. SDD+ is designed for high selling SKUs (Stock Keeping Units) stored across a network of micro-fulfilment centres for orders originating from Delhi NCR, Surat, Bengaluru, Kolkata, Pune, Hyderabad, Lucknow, Chennai, Mumbai, Nagpur and Guwahati. NDD offers assured delivery for intra-city orders with a cut-off time of 12 pm next day. 

Ecommerce logistics players including Xpressbees and publicly-listed Delhivery have also launched specific products to tap into growing D2C brands rather than cater to orders routed through logistics aggregators like Shiprocket.

Last year ecommerce companies revised their costs on the aggregator platforms to encourage brands and sellers to work directly with them, thus commanding better payments on orders. 

“For D2C brands, 60% to 90% of their sales come from online ecommerce platforms. These brands are trying hard to increase the percentage of their own digital channels. Our objective is to give an option to a brand saying that you can store your products at one-go in 30 locations,” said Banerjee. Once brands cross the threshold nearly 5000 orders a month, they typically prefer working with logistics players directly, he adds.

This also means that Ecom Express will  compete with Shiprocket’s strategy of expanding its network of fulfilment centres to cater to same day deliveries for its customers.

While Ecom Express’s primary revenue maker will continue to be shipments from ecommerce platforms, roping in D2C and digital brands from traditional retailers is likely to drive  growth for the coming year. It has also launched its Order Management System and Warehouse Management System as part of its end-to-end logistics offering Ecom Magnum and plans to build on it in the next 18 months. 

“The fulfilment centre vehicle will support our topline build up to the next level. It is close to 13% of our topline currently and it is doubling every year as of now. Profitability will be at core of what we want to do,” added K Satyanarayana, Co-founder and director at Ecom Express. 

He added that the primary business of the company continues to be express parcel delivery which contributes around 87% of the business. ExpressPlus, SDD, SDD+ and NDD will be a part of the express parcel delivery business. 

Founded in 2012, Ecom Express has thus far raised nearly $301 million across multiple rounds of funding, according to data research platform Tracxn. It last raised $39 million from returning investors British International Investment, Warburg Pincus, Partners Group and CDC Group in October 2022. The company reported Rs 91.4 crore in losses for FY 2022 including non-operational losses, as compared to profits of Rs 43.4 crore for the year-ago period, according to Tracxn.

(The article was updated to reflect changes as requested by the company)