The ecosystem around eCommerce has seen very few players solving the ground level issue like logistics as this space is currently ruled by few known players like BlueDart, Gati and Aramex. Despite presence of high entry barriers in terms of capital investment, Chhotu is one startup that has ventured into the world of logistics. Based in Delhi, Chhotu.in is a last mile delivery solution targeting the niche eCommerce logistics space. The startup claims to be eCommerce friendly as it is technology driven and wants to be an extension to the eCommerce sales channel.
Talking more about Chhotu’s expansion plans and logistic scenario in ecommerce, iamwire interacted with Navneet Singh, Founder, Chhotu.in. Explaining about the issues in ecommerce ecosystem in India in past one year Navneet pointed out that large courier companies are not up to the demand, start ups are not getting financed. Here are the excerpts of the interview.
What is your outlook on overall logistic scenario in context of ecommerce and online retail in India?
I think logistics is the heart of eCommerce. In India, eCommerce is facing huge challenges to scale up and logistics is contributing most to it. Although large courier companies have shown initiatives towards eCommerce logistics but they are failing to catch up with the growth. Some leading online retailers have setup their own logistics in few cities with mixed success. And then there are few start ups like us who are trying to bring in quality customer experience around online shopping.
Which categories in e-tail are challenging to ship from your viewpoint?
Large (or delicate) and high value items are most challenging. Former because of obvious reasons, latter because of cash on delivery.
E-tail is slowly catching up in India and so the new challenges for logistic players like you is also growing. What you see as major development/trends in logistic in the light of e-tail in India?
Yes, we are fully working on scalability. I think there will always be handful of companies purely in logistics space. Some of the large online retailers will try their hands on logistics and very few out of them will be successful.
What are the key challenges that you see primarily in ecommerce logistic?
Hiring right manpower is one of the key challenges. Another is, financing. Large courier companies are not up to the demand, start ups are not getting financed. Top few online retailers are adequately financed to setup their own logistics in limited coverage. Small and medium online retailers are worst hit.
What is the level of IT enablement e-tail demands at present in India and what major gaps need to be addressed in regard of IT enablement for overall logistic players in India?
Technology is by definition central to eCommerce. It is very important that the eCommerce logistics company should innovate with technology to create great customer experience. We at Chhotu have built our own system which is very open in terms of sharing the information with our partners (online retailers) and our customers. The central idea is to use technology for collaboration.
How do you see the trend of COD (Cash on Delivery) emerging as a preferable mode of payment (especially in tier 2 and 3 cities) in online retail? What are the challenges to logistic in Shipping COD orders?
Around 80% of online purchases are Cash on Delivery. It has proven vital for eCommerce growth and makes perfect in country like India where online payment penetration is so low. We see this trend becoming stronger. COD orders are not concrete purchases, in other words customer has not demonstrated a firm commitment to purchase. Customer can change his mind any time, so you can’t afford to be insensitive with the customer service.
Throw some light on the return rates of COD order you carry out? Please share some statistics of the same.
Typical industry figure is 30% return. Ours is 2% which includes every type of return. Our goal is to reduce logistics based returns to 0%.
What are the opportunities in ecommerce end mile deliveries? Who are the top ecommerce portals shipping their products through chhotu.in and which categories register maximum shipment?
The opportunity is great, but there are definitive entry barriers. We are working Myntra, Zovi, Urbantouch etc. Maximum shipments are Lifestyle products.
Almost all the ecommerce start ups existing in the eco system are not happy/satisfy with the service of third party logistics, they face issues like delay shipment and sabotage. Tell us, how chhotu.in plans to deal with it?
We are helping start ups for their logistics needs. We ensure within 24 hours last mile delivery and our success rate is 95%. We are leveling the field for start ups when it comes to logistics.
What suggestions you would give to online retailers (existing or upcoming) to address their logistic challenge?
We strongly recommend to focus on logistics before launching your online service. Tie up with good logistics companies.