Logistics Research Report Draft
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research report on logistics sector in india...
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INTRA-CITY LOGISTICS RESEARCH REPORT 2016
Table of Contents Introduction……………………...............1 Definition……………… ..........1 Logistics industry global trends and developments ……...…......1 Logistics industry in India trends and developments ……....……..4 Recent developments in Indian logistics industry……..…………………… ro!t" spurt in ecommerce and "yperlocal logistics…. .……………….. $a%or &layers in "yperlocal logistics in India…………………' Intra(city mini truc) aggregators… ……………….* lobal perspective…………………………..... 11 Trends and Development……………...1+ ,ummary………………………………...14 Contact Information…………………….1Company Information…………….…….16
Introduction Definition
Logistics management is the part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer's requirements.
third!party logistics provider "abbreviated #$L, or sometimes %$L& is a firm that provides service to its customers of outsourced "or %hird $arty& logistics services for part, or all of their supply chain management functions. %hird party logistics providers typically speciali(e in integrated operation, warehousing and transportation services that can be scaled and customi(ed to customers' needs based on mar)et conditions, such as the demands and delivery service requirements for their products and materials. *ften, these services go beyond logistics and include value!added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. +hen this integration occurs, the provider is then called a third! party supply chain management provider "#$-& or supply chain
management service provider "-$&. #$L targets a particular function in supply management, such as warehousing, transportation, or raw material provision.
The global 3PL market reached $750 billion in 2014, and grew to $157 billion in the US demand growth !or 3PL "er#ice" in the US 7%4& 'o'( o)t*aced the growth o! the US econom+ in 2014% " o! 2014, -0 *ercent o! all .ort)ne 500 com*anie" and / o! the .ort)ne 100 )"ed "ome !orm o! 3PL "er#ice"
ource/ +i)ipedia
Logistics industry glo!l trends !nd de"elo#$ents lobal Logistics ndustry is 34 5 %rillion in 201# representing 10 of lobal 4$. %he global transportation services mar)et is fastest growing sector with 7 y!o!y growth since 2011. 3 accounts for more than a 52 of global
transportation services sector. 8owever, the focus will shift to sian countries due to increasing intraregional trade activities.
ndia, ndonesia, alaysia, $hilippines, etc. have increasing intraregional trade in combination with high 4$ growth rate, thus transforming outheast sia into a new regional cluster. iven that the logistics sector is dependent on the global economic environment and international trade flows, the mar)et is still suffering the lingering effects of the global economic crisis and recovery has been slow. 9evertheless, sector players should be able to tap substantial potential for growth going forward. 9orth merica and outheast sia appear to be the most interesting mar)ets for logistics in general and contract logistics in particular. :merging mar)ets are e;pected to offer above! average growth rates for the industry. ntraregional trade is becoming increasingly important in sia in particular, and this, combined with high 4$ growth rates, may transform the region into the most significant regional cluster in the world.
*ver the past ten years, global logistics mar)ets have grown substantially < typically by 2.0!2.= times the global $4. n the economic crisis of 200>?0@, however, this correlation also wor)ed in the opposite direction. -urrent annual performance indicates a reduction in the multiple since logistics mar)et performance stagnated, particularly in 2012 and 201# while the economic situation was pic)ing up, i.e. a certain decoupling from the economic cycle is visible due to factors li)e less centrali(ation of inventory and reduced manufacturing in developed countries. Aegional trends! 3?9orth merica/ %he 3 and -anada's contract logistics mar)ets each grew Bust under 2.0 in 201#. n 9orth merica, the contract logistics mar)et grew 1.= in 201#. Cor the second time after 2012, the total si(e of the mar)et e;ceeded the pre!crisis level of 200> prior to economic downturn. %his was mainly driven by the increased manufacturing production in e;ico, resulting in a =.2 increase in contract logistics in 2012 as well as 2.0 in 201#. %he 201#!2017 growth forecast for 9orth merica is 6.#. :urope/ %he effects of the economic environment were therefore felt in the :uropean contract logistics mar)et. +eighted growth for the region reached only 1.1 in 2012, =.> for the -:: and 0.@ in mature +estern :uropean countries. n 201# growth was even slower with an overall growth rate
in -ontract Logistics of only 0.=. %he downturn in outhern :urope's economies resulted in a significant drop in contract logistics. ssuming an improving :uropean economy, the forecast indicates a -A growth rate of only 2.= and =.1 from 201# to 2017 for +estern and -entral and :astern :urope, respectively. sia $acific/ %raditional trade lanes connecting -hina with the 3 and :urope are losing some of their importance. %he odern il) Aoad between sia and the iddle :ast is also resulting in increasing trade. Crom 2001 to 2010, trade increased over 700 and now more than half of the iddle :ast's trade is with sia. :;cept for ingapore and 8ong Dong the logistics setup in sia is not as developed as it is in:urope or the 3, resulting in quite a low L$ score "logistics performance indicator&. ource/ rolandberger, global logistics mar)ets
Logistics industry in Indi! trends !nd de"elo#$ents ndian logistics mar)et is e;pected to grow at a -A of 12.17 by 2020 driven by the growth in the manufacturing, retail, C- and e!commerce sectors.
ndia spends around 15.5 of its 4$ on logistics and transportation as compared to less than > spent by the other developing countries.
#$L logistics mar)et in ndia is e;pected to be worth 3E #01.>@ billion by 2020. 9*F*9*3 estimates that the warehouse mar)et in ndia is e;pected to grow at a -A of 10 whereas freight forwarding mar)et is e;pected to grow at a -A of 12 till 2020. ource/ researchandmar)ets, logistics in ndia
ndian logistics sector is estimated to have grown at a healthy 1= in the last five years. 8owever, growth in sub!sectors varies, with the lowest being in basic truc)ing operations and highest in supply chain and e!tailing logistics. ome studies estimate the share of ndiaGs logistics spend in 4$ at 1# "versus 7!> in developed countries&, implying overall si(e of E1>0!220 bn "direct costs Hwastages from inefficiencies&. comparison with other countries shows inefficiencies are high in the ndian
-apacity constraints and inefficiencies can be noted from the high transit time in rail as )ey train routes operate at I110 utilisation, thus leading to an average speed of 2= )m per hour. %he road sector is fraught with inadequate and low!quality highway availability, thereby limiting the truc)sG si(e and impacting economies of operation.
4espite being an economical mode of transport, railways has lost mar)et share in freight movement to roads in the last few decades due to capacity constraints. -ompared to other countries, ndiaGs rail share in goods transport is #1, which has come down from 60 in 1@>0s and 5> in 1@@0s. ource < Cinancial :;press, logistics set for rapid growth ar 201=
logistics sector.
nfrastructural bottlenec)s across modes "rail, road, waterways& have stifled the sectorGs growth.
source/ motilaloswal, logistics industry sector analysis
ource/ business!standard
Recent de"elo#$ents in Indi!n logistics industry Logistics industry in ndia has seen a recent spurt and activity due to the advent of ecommerce and hyperlocal business in ndia. +hole new industries are waiting to be serviced for their logistics requirements.
yriad challenges surround last!mile delivery in ndia, the costliest leg of the supply chain. %echnology startups have now come up with various innovationsKreal!time $ trac)ing a fle;ible sign! in, sign!out model to balance demand and supply of delivery boys and a mil) run model, whereby fleet members can pic) up and drop deliveries on a dynamic route.
%hese firms have had little difficulty scaling to reach over a thousand orders per day within months, and all have ambitious plans to e;pand their wor)force to be thousands!strong by the end of the year. :;cerpt!
agar)na, a *o*)lar chain o! re"ta)rant" here, ha" "h)t down it" inho)"e !ood deli#er+ "er#ice% t ha", in"tead, o*ted to )"e oadr)nnr !or getting hot meal" to it" c)"tomer"%
Thi" i" one o! man+ re"ta)rant" and "mall b)"ine""e" that !ind it too e6*en"i#e to hire a !)ll time deli#er+ "ta!!% oadr)nnr i" a h+*erlocal logi"tic" "tart)* that enable" la"tmile deli#er+ o! *ackage", "er#ing "mall b)"ine""e" ")ch a" re"ta)rant", !lori"t" or la)ndr+ "er#ice", a" well a" larger ecommerce entitie" ")ch a" .li*kart and Sna*deal% erchant" *a+ oadr)nnr " 40 !or a reg)lar deli#er+ and " 55 !or a *remi)m deli#er+ )* to 4%5 km, be+ond which the com*an+ charge" " 10 a km%
-ompanies that promise large!scale pic)ups and drop!offs using minitruc)s, such as oovo, $orter, %heDarrier, and Jlowhorn, have all received seed inBections recently. -ompanies solving challenges of intercity delivery, too, have received funding, notably %ruc)sCirst, which received E10 million from C $artners in ay.
%his )ind of funding activity in the logistics space, and the solutions that are being developed, does not have a parallel in other startup ecosystems. 4eveloped countries do not suffer from half the headache that delivery incurs -hina's ecommerce boom coincided with heavy government investment into transport and road infrastructure, both within and between cities, minimi(ing on!ground hassles for companies.
8commerce deli#erie" ha#e taken the lead% 8 commerce i" hal! o! all tran"action" !or oadr)nnnr and the "hare i" e6*ected to go )*% " more *eo*le "ho* online, getting *ackage" to c)"tomer" on time i" getting harder !or com*anie" ")ch a" Sna*deal and .li*kart% 9hile the+ are in#e"ting hea#il+ on "etting )* wareho)"e", demand i" !a"t o)t*acing their growth%
ource < economic times, how hyperlocal logistics are new attraction for investors pr 201=
4elivery is a problematic thing, especially in the last mile, because of "staffer& attrition, which stands at about >0 per cent in large cities li)e Jengaluru.
%he ndian e!commerce industry is poised to cross 34 100 billion by 2020. 9ow, e!commerce giants who have already spent millions online on customer acquisition are ac)nowledging the hyperlocal
Gro%t& s#urt in eco$$erce !nd &y#erloc!l logistics
opportunity and preparing to parta)e in the hyperlocal gold rush.
ma(on, Clip)art and $aytm are prepared to up the ante by launching their hyperlocal services. ma(on Dirana is already operational as a pilot in Jengaluru. $aytm has launched Mip mobile app and is testing in Jengaluru. *la has launched *la store, an hyperlocal grocery mobile app.
%he strong emergence of e!commerce will place an enormous pressure on the supporting logistics functions. %he proposition of e!commerce to the customer is in offering an almost infinite variety of choices spread over an enormous geographical area. Cirms cannot compete solely based on sheer volumes in todayGs ever!evolving, information symmetric and globali(ed world of e!commerce. nstead, the realm of competition has shifted to delivering to ever!shortening delivery timeliness, both consistently and predictably. Logistics in developing economies such as ndia may act as the biggest barrier to the growth of the e!commerce industry. %ill date, logistics models developed in ndia target the metropolitan and the %ier!1 cities where there is a mi; of affluent and middle classes and the internet penetration is adequate. ccording to industry benchmar)s, the delivery cost in the captive logistics models are 10 to 20 e;pensive than the #$Ls whose e;pertise lies in quic) delivery at an affordable cost. Curther, the logistics set!up and requirements in developing countries are also dependent on the purchasing behaviour of the customers. ndustry estimates reveal that the total spend on warehousing and sortation centers could be as high as # to 6 of top!line revenues, which represents an cumulative spend of over 5=0 to @00 million 34 of spend in warehousing till 2017!2020. %he industry is e;pected to spend an additional =00 to 1000 million 34 in the same period on logistics functions, leading to a cumulative spend of @=0 to 1@00 million 34 till
2017!2020. ource/ *-8 N $w-, growth of ecommerce in ndia
e:ommerce logi"tic" market in ndia i" *egged to reach $5%1 billion b+ 2020% La"t mile logi"tic" con"tit)te" 40& o! e:ommerce logi"tic" and i" e6*ected to grow at a :; 4-& to reach $2%1 billion b+ 2020% < iamwire%com
%here are 7 firms who are the prominent names in the J2J logistics space.
Aoadrunnr
*pinio
hadowfa;
$arsel
rab
4elhivery
Ouic)li
ndian hyperlocal logistics ndustry si(e 201= "34 &/
J2-
-onceirge
5=
roceries
2#.2
Cood
5#.=
J2J
edicines
@.2
:com :;press
1##
:nd to end
Logistics
12
4elhivery
>=
:nd to end
Jlac)Juc)
#0
Creight
Aivigo
#0
nter!city transport
AoadAunnr
21
8yperlocal
oBavas
20
:nd to end
Oi)$od
0@
$arcel loc)ers
hadowfa;
>.>
8yperlocal
*pinio
>.#
8yperlocal
%he $orter
6.=
ini truc) aggregator
!)nding mone+ toward logi"tic" "tart)*" )m*ed !rom US$/%3 million to US$17%7 million between 2014 and 2015% The ndian h+*erlocal market re#en)e" grew at a rate o! 41& in 2015% The re"earch re*ort re#eal" that the ndian h+*erlocal market will grow at a con"iderable :; rate, th)" *roected to e6ceed $343% n 2,30 :r( b+ 2020%
ource/ %rac;n, hyperlocal landscape
9ithin h+*erlocal", "er#ice" ha#e higher margin" o! aro)nd 20& a" o**o"ed to *rod)ct ba"ed model" which earn 210& margin" or e#en nonh+*erlocal ecommerce com*anie", which o*erate on 37& margin", de*ending on the categor+%
.inancial e6*re""
ource/ techinasia
%op funded logistics startups in ndia "34 &/ last year, with about E#> million being invested into the sector.
'!(or Pl!yers in &y#erloc!l logistics in Indi! ccording to %rac;n %echnology, a start!up trac)er, at least 27 hyperlocal business!to!business delivery start!ups have been founded in ndia since Panuary
n terms of volume, the maBor hyperlocal logistics service providers in ndia are/ Aoadrunnr rab
Ouic)li hadowfa; F4eliver Ro!drunnr)co$ /
Aoadrunnr was founded in Cebruary this year by Clip)art employees ohit Dumar and rpit 4ave to focus on business!to! business deliveries. t ma)es use of an on!demand model to partner delivery boys and manage lean and pea) demand, and charges businesses a flat
S&!do%f!,)in / hadowfa; is a technology based
J2J on!demand delivery service. $rovides delivery solutions to local sellers requiring e;press delivery without the need to hire delivery boys. $rovides tech!enabled customer service trac)ing along with real!time consumer feedbac). -harges the merchants on a per!delivery model. #=H employees and #=0H riders as of ug 201=. -loc)ing #000 orders daily. Aaised E#00D in an angel round led by Dunal Jahl, Aohit Jansal, Mishaan 8ayath "$owai La)e Fentures& N $rashant ali) "Limeroad&. deli"er)in/ F4eliver provides hyperlocal logistics
rate per delivery. Aoadrunnr has received funding of 34 21 till date. ccording to the company, it is doing close to 2=,000 deliveries a day on average with a fleet of nearly =,000 delivery boys. Gr!)in/ rab.in "formerly rabarub& enables
online food delivery for local restaurants. +or)s with over 550 merchants in 7 cities as of ug 201=. Aestaurants using rabGs services will be able to trac) and share precise delivery time with the customer. Cor the financial year 2015!1=, it delivered orders worth As #= crore in umbai. 8as more than =00 delivery boys on field and promises a delivery in #= min. 4elivering over 2=00 orders per day in umbai and $une. Aaised E1 million from *liphans -apital and independent investor 8aresh -hawla. Aeported to be raising E10 in ugust 201=. *uic+li)co$/ Ouic)li is a mobile platform which
provides deliveries on demand "4o4& for businesses. erchants can schedule a delivery through its mobile app or a missed call, and then Ouic)li's agent pic)s up the pac)age and delivers it to the destination. -laims to deliver any product in urgaon in under an hour with goods li)e medicines and food delivered in under 1= minutes. -ustomers include local retailers, restaurant owners, property managers who need to send documents to their clients, among others. 8as a feature for businesses to trac) the pac)age and )eep their customers posted about the same. Launched in pril 201= in urgaon and has acquired #=H paying businesses in a fortnight. :mploys 50 delivery e;ecutives as of ay 201=. 4oing 1000 deliveries a day as of ept 201=. $lans to e;pand operations to entire 4elhi 9-A region, Jangalore and umbai in the ne;t few months. Aaised undisclosed funding from =00 tartups, former Aoc)et nternet partner ato $eric and some high networth individuals
services in 8yderabad. t provides last mile delivery, cash on delivery, pic)up N delivery, cash before delivery and reverse logistics services for a number of goods. t provides users with food delivery from the listed restaurant partners of the company, office supplies delivery, medicines, gifts, groceries and document delivery services. t provides 5 hr, 12 hr and 25 hr delivery services. 8as various sources of revenue, %he primary and direct source of revenue being from both individual customers N local business including local ecommerce portals. %he econdary source of revenue is the income generated through commissions charged to the restaurants for giving an order. *ther sources of income include advertising through the delivered parcel as a medium.%heir monthly revenue cloc)s up to around 9A 2.= la)h per month of which 20 income is from the secondary source while the remaining >0 is primary revenue generation as of Cebruary 2015. O#inio. *pinio would provide delivery of food,
grocery, ba)ery, medicines etc. Launched in 2015 as an opinion e;change platform, pivoted to logistics segment in 201=. 8as tied up with around =00 merchants in 1= areas in Jengaluru and three areas in 4elhi as of ept 201=. Counders are alumni of % Danpur. Cunded by ccel $artners and %rac;n Labs. *pinio has raised E7 million in eries! funding, along with participation from ands -apital and ccel $artners, apart from 4elhivery. ource/ trac;n.com
Intr!city $ini truc+ !ggreg!tors T&e/!rrier. based out of Jangalore, %heDarrier
aims to provide on demand logistics for intracity delivery for businesses and individuals. %hey currently operate about #00 Light -ommercial vehicles "L-Fs& through partners all around Jangalore. %hey have served over 1000 customers so far. %o ma)e the process more seamless, they
recently launched an app for the drivers and are now in the process of launching a consumer facing app as well. 0lo%&orn. Jlowhorn is a Jangalore!based online
mar)etplace for last mile logistics. Jlowhorn offers a tech platform connecting customers who want to move goods quic)ly and effortlessly to owners of mini!truc)s. 3nitus eed Cund, a venture seed fund supporting startups innovating for the masses, announced that it has led the seed round investment in Jlowhorn. %his investment mar)s 3nitusG second in the mobile!on!demand sector, following maadi, which currently has have over @,000 drivers available in Jangalore via their mobile apps. oo %ruc) provides truc)s on demand to transport goods for customers. 8as tied up with a networ) of vehicles and with use of technology enables customer to get the closest truc) for moving their goods with reliable drivers. -harges e;tra for labour costs. 4eveloping a mobile app. *perating in -hennai as on Pune 201=. tarted out in Ceb 201= with 20 %ata ce ini %ruc)s and now have a fleet of 7= truc)s "owner cum drivers& which include truc)s li)e %ata ce, sho) Leyland 4ost and %ata 507 spread across -hennai. -laims to be growing at about 100 per cent, month!on! month, and has completed about 2=0 orders in the month of Pune 201=. GogoTruc+.
S&i##r. hippr is an online logistics platform. ts
first product, inihippr is a local deliveries logistics solution that aggregates intra!city transportation providers. 3sers can boo) online or call the service, fill in the details about the shipments and then the delivery is done by vehicle owners who have tied up with hippr. inimum price for a delivery is 9A =00. -laims to help single vehicle owners reduce their idle time by 50. Aeceived 600H queries within one month since launch, with 60 queries converted to successful transactions. -urrently operating in Jangalore. $lanning to e;pand into corporate segment. Jecame part of the i2indiaGs startup incubation programme Fenture Cactory in Pan 201=, raised E=00) from the same in Pune 201=. Porter. $orter "Aesfeber Labs $vt Ltd& aids in
ma)ing intra!city pic)ups and deliveries efficient and reliable with economical pricing. 3sers can trac) the drivers in real!time through the web platform and even get periodical alerts. $latform includes management tools for live trac)ing with replay of
historic trac)s, geo!fencing alerts and scheduled reporting. -orporate clients include %-, 4elhivery and 3rbanLadder. -loc)ing 2000H transactions every month. 8as a fleet of 100 truc)s in umbai. :;panded to 4elhi?9-A and Jangalore after funding. Aaised As #= crore round led by equoia -apital ndia with participation from Dae -apital and angels li)e haadi.com founder nupam ittal, Creecharge co!founder andeep %andon and P Cinancial's AaBeev -hitrabhanu. 'oo"o)in. oovo is an online portal for intra!city
goods transport for individuals and businesses. -ustomers can boo) through its website, mobile app or call center, get an instant quote, information about the driver designated by oovo's technology and later a call from the driver. -ustomers can also )eep trac) of the driver through the $, while they do the delivery. $rovides services li)e furniture and home appliances movement, relocation services, moving goods in and out of warehouse, custom delivery of goods to retail stores, and construction supplies movement. vailable in 4elhi, 9oida and urgaon as of Ceb 201=. -loc)ing 1000 orders per month from clients including consumers, small businesses and online retailers. Aaised seed funding from Qou+e-an Fentures and other angels including Fi)ram -hachra of :ight nnovate, former $ay%m F$ $ratyush $rasanna, nindya huvra en, $resident of 8A Aeliance Pio JiBay ahoo, 9itin ethi, ameer 9agpal of -ocubes.com and 4oshi Camily of 4oshi 4iagnostics. Truc+su$o. %ruc) umo is an online mar)etplace for transportation solutions. -onnects individuals and :s with moving needs to transportation companies who can fulfill those needs. -ustomers enter their pic)!up and drop!off locations on the site, get instant quote and rate the e;perience after the trip is over. Qet to launch as of Pan 201=. Counding team from %, J and -olumbia 3niversity. s of ept 201=, it provides services within 8yderabad only. Inst!"!ns. nstaFans is an on!demand intra!city mini!truc)s provider. $lans to use algorithms and automation of processes to improve utilisation of truc)s and manage delivery times better. $lanning to launch mobile app soon. -urrently catering to Jangalore. Aaised funding from 4ell ervices president uresh Faswani's family office. Tur!ntDeli"ery. %urant4elivery is a provider of on demand logistics services. %hrough tie!ups with various partners, it provides runner boys for hyperlocal and bespo)e delivery, mini!truc)s for intra!city shipping and truc)s for intercity goods transport. $artnered with RpressAunner, Ouic)li,
LoadDhoB, Pugaado, -argo-arriers, Ouifers, Maicus, among others. ource/ trac;n.com
Ot&er #l!yers.
ahindra martshift/ ahindra N ahindra launched an intracity logistics aggregator platform called marthift, which will act as an e;change platform for cargo owners and transporters. *perates on an asset!light model, not owning the fleet of mini!truc)s. llows anyone with a mall -ommercial Fehicle "-F& to register on the platform. +or)s on a reverse!auction system, wherein the user sets the base price and the transporters bid lower prices for the services. Joth parties rate each other after the Bob is done. *perating as a separate business "*ri(onte Jusiness olution Ltd& from ahindra N ahindra. n arch '16, tied up with LendingDart for enabling associated J's to get wor)ing capital with ease. Loading%empo, Logisure and Qelo%empo in Paipur, 3FA and %empawala in hmedabad and ndore's aalgaadi.
Glo!l #ers#ecti"e on intr!-city logistics 1 !ggreg!tors lobal logistics players are highly organi(ed. %ypical logistics problems faced n emerging mar)ets li)e ndia are virtually non e;istent in developed mar)ets. %his is the reason that intra city logistics are mostly covered by large players that provide end to end solutions li)e 3$, Ced:;, 48L, etc. who have streamlined their
processes for inter!city logistics. 8yperlocal logistics industry has mostly emerged due to demands and necessity of current scnearios in ndian mar)et. dding to the fact that developed mar)ets generally donGt have -Fs"mall -ommercial Fehicles&, visible mostly in emerging mar)et, or small businesses that operate them. lobal ecommerce platforms generally donGt require #rd party solutions for last mile or intra city logistics. ost of the intra city providers are small, unorgani(ed businesses li)e bi)e couriers, pac)age carriers, etc. Jut there are no organi(ed intra city freight services e;cept for large corporations. 4ue to this dominance of large players, hyperlocal and intra!city solutions, specifically minitruc) aggregators have not emerged in the global conte;t. t is a phenomenon specific to regions li)e ndia, ingapore and -hina.
Trends !nd de"elo#$ent %here is a huge mismatch between supply and demand in intracity?hyperlocal logistics, in ndia. -ustomers and vendors ali)e have several pain points when it comes to logistics, and several players have emerged in different regions to address these issues. any platforms have emerged to provide vendors, small businesses, and individuals with independent -F operators, to meet and cater to their shipping and transporting needs. dd to the fact that the -F transport industry in ndia is highly disorgani(ed and undisciplined, these startups are trying to solve these pain points. :)rrent intracit+ L:= market "i>e i" clo"e to $-billion, and i" *roected to be aro)nd $10billion in the ne6t 3 +ear"% ll com*etitor" combined ha#e ca*t)red le"" than 1& o! the entire market% iamwire%com
%he -F industry is e;pected to reach 1 million units by CQ 2021. %he )ey demand drivers for the industry would be/ %he need for last mile connectivity for both goods and people transportation Jetter operating economics combined with better financing options ma)ing -Fs more lucrative for end customers 9ew applications being developed to e;pand the mar)et, prompting newer customers to buy source/ ahindra.com -Fs %ransportation presently accounts for =.= per cent of the 4$, and intra!city logistics is a significant part of it in value terms umbai alone accounts for 6 !7 million transactions a month in intra!city logistics, and there source/business today are over 1> la)h vehicles available in the ecosystem across the country
S2OT !n!lysis of intr! city logistics usinesses. Strengt&s
Ssolves present customers pain points li)e reliablity, discovery, contact, price variabliity, safety and quality of service Saddresses the smal business owner?vendor?operator problems of vehicle utili(ation, customer acquisition and protecting driverGs rights Sadvantage of technology for wider customer reach and better utili(ation of truc)s, route optimi(ation, etc. Saccountablity ? trac)ing of independent contractors Seconomies of scale to cut costs and ma;imise effciency and revenue Saggregation is an asset light model, not capital?resource intensive 2e!+nesses
Shighly disorgani(ed and split industry, need for proper structuring and organi(ation of -F operators
Slow barriers to entry, overcrowded segment with many players entering the mar)et Sintense competition in the segment with no tried and tested successful model Smost players are still trying build business and scale Shard to get drivers and contractors on board?verification averse Snot easy to scale across geographies
O##ortunities
Shuge gap in supply and demand, which provides a large, lucrative and untapped mar)et Sboom in e!commerce, coupled with the needs of frequently relocating students and professionals has led to a spurt in the need for intra!city transportation Sin intra city transport, it's hard for shippers to discover prices in real time. lso, there is demand opacity and less visiblity where truc)ers ply their vehicles empty while they return from a trip Smore than two million registered small truc)s that transport more than 1.= million tonnes of goods
T&re!ts
Slocal vendors and small -F operators?fleets Sthreat of entry of large player in the industry
Su$$!ry %he hyperlocal mar)et in ndia has been largely driven by a rising number of startups and consumers "who prefer on!demand delivery&. s compared to 2015, the ndian hyperlocal mar)et revenues grew at a rate of 51 in 201=. %he research report reveals that the ndian hyperlocal mar)et will grow at a considerable -A rate, thus proBected to e;ceed E#5#.6 n "9A 2,#06 -r& by 2020. %he e;ponential growth of online buying in ndia has resulted in la)hs of pac)ets to be delivered every day. lso, in recent years all maBor e-ommerce players have started offering ne;t day and same day deliveries. 3nfortunately, any supply chain is only as strong as its wea)est lin) and at present last mile is that wea)est lin). :conomies of scale, finely tuned operational efficiencies, advanced technologies and above all, high quality manpower are the )ey factors that lead to success in last mile delivery. fter cabs, inter and intra!city truc)s seem to be the ne;t logical mar)et for both ndian entrepreneurs and F-s to go after in the logistics sector. %he sector is unorgani(ed to an e;tent people and truc) operators face issues related to discovery, accessibility, and clarity on price points. %he mar)et was controlled by the TdriversG and customers had no transparency on the actual price points. %he drivers, on the other hand, had idle times of about 50 to =0 per cent while on their Bobs. initruc) aggregators have emerged to solve this problem. 9owhere near profitability yet, the mini!truc) aggregators are currently building business and scale. ngel investor Beet Dhurana believes that inter!city aggregators will scale up more quic)ly compared to intra!city operators, which is more of an informal business. ?!ter bringing all the "takeholder" online, there i" a higher matching o! demand and ")**l+ which ha" led to more e!!icient )"age o! a#ailable in#entor+% @owe#er, "e#eral o! the"e intracit+ aggregator" will not be able to ")r#i#e beca)"e c)"tomer ado*tion i" not eno)gh,A he said. $eople roup -:* nupam ittal, who has invested in $orter, says the truc) aggregation mar)et is much larger than the cab aggregation mar)et but also highly inefficient. ?There!ore, it o!!er" an o**ort)nit+ to introd)ce di"r)*ti#e model" and create #al)e%A s he e;plains, the challenge is to create a service that solves the inherent problems. ?'o) donBt ha#e control o#er the dri#er, he i" o)t o! +o)r "ight% Thi" b)"ine"" i" all abo)t e6ec)tion, it i" a higho*eration" game and team" that demon"trate that will make the c)t% t i" not a one *la+er game at the moment and there will be a hand!)l o! *la+er" a" it i" a large market,A he says.
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