With the rise of the online retail industry in India, the demand for packaging solutions has been on the rise. Keeping in view the need for such services, we interacted with Gaurav Vora, Director of Baroda-based Dynaflex, provider of packaging solutions to the online retail industry. Dynaflex has been providing services to governments in India and abroad in the form of security envelopes and other solutions for many years and as a result, found itself in the right position to service the online retail industry when the boom happened. In this exclusive interaction with Iamwire, Gaurav shares the inside story and lays down the key factors that determine the choice of materials and importance of packaging for building the brand proposition. Below is the excerpt of the interaction
What is the importance of using proper packaging materials in building a brand?
Packaging is very critical in the online retail industry as there are no stores which build a company’s image or brand. Thus, the consumer views the packed material as the company’s delivered product and perceives the image of the company through that. With online retail, there is essentially a Zero moment of Truth – when a consumer looks at a product online – and then a second moment of truth, which happens when the consumer receives the package. Thus, the first moment of truth disappears, and everything else being the same, packaging differentiates a brand and a company in a consumers mind.
What is the time-frame and process of going to market for a retailer?
Normally, after the initial contact stage, the first step is to understand the requirement of the client. Till now, the retailers have tried to find a packaging solution, and have been using what is available to them, not what they need. Due to lack of options, retailers have started to use whatever was offered and 99% of the times, it was not the right solution, which is very surprising. Understanding the needs (material, size, protection, weight carrying capacity etc.) of the client takes about 5-7 days, which is followed by a small sampling if required. For eg. Furnishings is an emerging category which requires sampling, whereas books, apparels are standard categories. This is followed by designing keeping in mind the product category. Overall, the entire cycle gets completed between 3-4 weeks.
How many online retail clients are you currently servicing and how has this business evolved for you over the years?
The majority of big players are either already doing business with us or are in the final stages of negotiation. We are also in talks with a lot of smaller players who now want to do business with us.
What are the key differences between packaging solutions offered by Dynaflex as compared to others and what are your USP’s?
Our focus on quality, service, consistency, volumes & innovation set us apart from our competitors. Our willingness to invest in our business, systems and our people, and the urge to come up with innovative futuristic packaging solutions ahead of our customers demand curve has today resulted in keeping our clients abreast with the packaging that is comparable to the best in the world.
How many packages do you supply for eCommerce companies and how has this business evolved over the past one year?
Our current capacity is about half a million pieces a day, and by the time we finish our current expansion it’ll be one million pieces per day.
Have there been instances of clients asking for express shipments and servicing their requirements in shorter time-frames?
Yes. Many a times, you never know which product under which category would sell where. There have been instances where clients have not forecast demand well for certain products and have found themselves in a spot of bother for need of packaging solutions for the product. We have now developed our capabilities to an extent where we can deliver and ship products overnight to any region and thus meet unexpected demands.
What is the growth pattern over the past couple of years and is it correct to say that the service provider side of the e-commerce business is profitable even today?
We have grown exponentially over the past couple of years. We are profitable now as we have constantly invested in our capabilities over a number of years, which is why we have found ourselves in this profitable position. We keep investing in our technology and even now, my team is flying down to Germany next week to finalize an order for the latest machines. Frankly, e-commerce has picked up over the past 1 year only and business from each of my clients keeps growing at least 2-3 times every cycle.
Being a critical service provider for the e-commerce provider in India right now, how do you reach out to your clients?
We employ multiple channels and participate in a lot of industry events and conferences to reach out to retailers. Also, the latent consumer demand has also pushed the retailers to look for us and we are doing good business due to it.
What are the key factors that drive demand for your products and is it cyclical in nature?
The demand is not cyclical as clients need packaging at all times. However, peak demand has been a bit cyclical, especially with electronics and books which are very fast moving categories.
What are the key parameters that determine the type of packaging that is required for different categories in e-com such as electronics, books, durables, apparels etc.?
Certain categories need extra protection, such as mobile phones, which cannot get scratched. Certain products just need security, while some other need cushioning. That is essentially what decides the choice of material used across categories.
What are your revenue targets for the current financial year and how do you plan to meet the rising demand from the online retail sector?
We expect our revenues to minimum double over the coming year. We do a lot of business overseas as well, which has also seen increased demand. We also do a lot of business with governments, both domestic and international. Because of all the other business that we do outside, we have enough capabilities right now to manage demand from the online industry for the next 5 years.
Is warehousing a challenge for Dynaflex?
Not really. We have enough space and ship products to both domestic and international locations using leading logistics and courier companies. We have properly thought out our manufacturing and storage needs and are well placed to meet the market demand.
How many employees do you currently have?
We are based out of Baroda and have over 150 employees in the manufacturing unit, aside of our sales and management staff.
Any plans of diversifying the business in terms of products, segment, reach etc.?
Absolutely – our customers are demanding that we add allied products so they don’t have to chase multiple small vendors. You will shortly see more happening on this front.
Any plans of opening an online store where customers can choose and customize bags and packaging solutions as per their choice?
Yes we intend to. Thousands of small businesses today need high quality packaging material in small quantities.And today it’s extremely difficult to consistently source quality products in small volume in timely manner. To address this segment we are launching “www.packingsupply.in” shortly.