Can logistics be a Game-changer in the e-commerce industry ?

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In the old days, if, you or someone you knew had to buy (say) a pair of shoes, your father or mother would take you out to shop for a pair, on one of those “Shopping” days (Sunday killers). Now, move to 2005(only India, I mean) had all these international e-commerce portals plastered all over the net. The convenience of shopping for our “preferred” underwear (wait, let me laugh to my heart’s content, first) to a handmade pair of shoes over the net, of the right size, delivered to our door step (well it took a few days, but, then that’s because you were lazy enough not go buy it from a shop).

Online retail has picked up a pace faster than American and European markets, the Indian e-retail/e-commerce (pick one) has almost doubled since 2013 at INR 6,700 crores ($980 million!) and has been forecasted to *76 times that by 2021 at INR 4,30,000 crores ($76 Billion!!!) according to Technopak Advisors(A Global Advisory Company).

One thing to keep in mind, all e-commerce portals are nothing more than Online Marketplaces with almost none to few products of their own, they offer a virtual showroom/shop for the seller, who further designs it as per the nature of his brand. The virtual shop saves the sellers from interior to rental, all costs of a physical shop. The marketplace charges the seller competitively as it wants to be the best online marketplace, with shops/products in every category. Shopify.com, zepo.com, buildabazaar.com are a few examples with heavyweights like eBay.co.in and Amazon.in.

Yet, the seller does not only come for the virtual shops with the all over the world (there are country restrictions, but hey, may I finish please) he/she gets. They come for the LOGISTICS (doubtlessly, the Holy Grail of E-commerce). The sellers are able to conduct their business through the portal as it provides credibility by association and the portal takes a cut of the sale (usually 3.5-4.5 %, it is a win-win situation for both, the seller and the marketplace as such an arrangement implies there shall* be no listing price). Delivering the product to the customer on time is a big challenge for virtual stores. Though online stores use courier companies for delivering the product to customers, there are companies that handle logistics and product delivery for e-commerce.

The Global Game
In the age of net the ever-growing virtual marketplace is a great revenue churner. In recent years online shopping has seen a spike, and the numbers are proof of it. In 2009, 4 years after launching it’s “.in” address, e-Bay launched a new address –www.ebay.in/geb. GEB, as you may have noticed simply stands for Global E-Bay (I still want to know what that abbreviated “E” means though, hmmm…). What “GEB” really does is, it lets you purchase products from International sellers and have them delivered to your home address in India and includes the duties and customs to the invoice. A service only useful for consumers who know or believe tampons to tech international standards are far superior than Indian standards, as the products end up costing (after delivery) almost the same at any E-commerce portal in India (with minor fluctuations in price, of course!)

One of the few great portals for international online shopping is borderlinx. Since, not all kinds products can be shipped even with GEB, Borderlinx helps you order anything, their prices are duty included(redirects you to an extension of the site which shows duty included in product price, with great prices and cheapest shipping). The customer adds the shipping address of the country from where he’s buying the product (borderlinx warehouse) and adds credit card details and sorted. The logistics in India are taken care by DHL and UPS, with a 99% delivery status within 2-5 days is surely a sweet deal. Yet, due to it being so new to the Indian market, the clientele is a 100% from urban areas, and they’ve not yet been faced with logistical issues (deliveries) as urban India is by far more sorted than rural India in terms of accuracy & accessibility in delivery.

The most preferred payment mode in India is Cash-On-Delivery (COD), and to collect the product from customers in case of returns. Chhotu.in & Delhivery.com are two providers of logistics services to e-commerce stores in India. DTDC has launched DotZot.in, a service exclusively for e-retail. Value Payable Post (VPP), the cash-on-delivery equivalent service offered by India Post.

According to media reports published in April 2013, India Post is exploring the option of providing specialized logistics solutions for e-commerce. If the postal department can start such a service successfully, online stores would be able to service a large number of customers living in remote areas of the country.

by Rishabh Mohan Bhasin.

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