BENGALURU: Indian online shoppers would
ideally like to push the button on their purchase and hear the doorbell chime
immediately after, announcing delivery. That's not going to happen anytime soon
but e-tailers, led by Flipkart, are trying to get as close as they can. The
country's largest online retailer is figuring out how it can get goods to the
customer's doorstep in as little as three hours.
Bengaluru-based Flipkart is evaluating which
products and cities it can start with even as it considers pricing for the
service, which ET learns could be rolled out in the coming six months.
"We have to figure out the technology,
pricing for these services," said Sujeet Kumar, head of WS Retail and
ekart Logistics. "Such deliveries are necessity driven — say a thing a
customer wants to gift or something he needs immediately.
Kumar, who joined Flipkart in 2008, declined
to put a date on when the logistics arm, ekart, could start with this service.
WS Retail, which used to be part of Flipkart, has since been spun off and is
now the largest vendor on the Flipkart marketplace. "Flipkart has to offer
a viable business model because it (3-4- hour delivery) will be expensive for
the customer," Kumar told ETin an interview last week. However, ET learns
it could start with some products in 3-4 cities as early as July.
India's e-commerce space has grown rapidly in
the last few years since Flipkart first started operations in 2007, when most
deliveries took a few days. Now, the three top online retail firms — Amazon
India, Flipkart and Snapdeal — offer same-day delivery in big cities for a fee.
They deliver the next day for free in the big cities but deliveries can take
longer outside these areas.
Faster delivery could, therefore, prove to be
a game-changer in the country's fiercely competitive e-commerce space, reckon
experts, and shortening the shipping time to a few hours may draw more users.
This could also persuade Amazon India to bring the service to the country. Its
parent ships goods, including detergents and shampoos, to consumers in
Manhattan in 60 minutes for a $7.99 fee.
To be sure, there are more than a few wrinkles
that need to be ironed out, said experts.
"There are two important things retailers
need to get right to make this work," said Karan Girotra, professor of
sustainable development at Insead. "First, they need to select a small
subset of their offerings which are available with these time frames. Second,
meeting this delivery promise requires organisations to build very different
logistics and operational systems than those necessary for traditional delivery
route-based delivery systems For instance, retailers may need to have many more
warehouses in central parts of the city to make these work."
Flipkart, which already offers users across 10
cities same-day delivery, says it has a strong logistics and delivery team in
place, with 13 warehouses and over 12,000 people helping with last-mile
delivery. "The kind of data we have is much richer than, say Google
Maps," said Kumar, adding that the company will start deploying more
technology as it focuses on providing value-added services, including faster
delivery, as it seeks to edge past competition.
Girotra also believes that the marketplace
model may make it difficult to bridge the time barrier.
"Players with marketplace-based models... will find it much harder to pull this off," he said. "For such players, the delivery often involves picking up the merchandise from a third-party location and it is much harder to offer ultra-fast delivery.
"Players with marketplace-based models... will find it much harder to pull this off," he said. "For such players, the delivery often involves picking up the merchandise from a third-party location and it is much harder to offer ultra-fast delivery.
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