As India experiences a hope for growth with its recent leadership change, online industry gears up to expand. According to a recent post by Economic Times, E-commerce companies in India are projected to recruit over 50,000 skilled manpower across top class engineers / professionals from IITs, IIMs and a large number of ground fleet.
Flipkart may be the leader in this recruitment spree, with projected 10000+ hires. Which is way above anticipated hires from other ecommerce companies. While other companies are aligning team expansions across technology, merchandising, customer support etc. Flipkart may hire most manpower to expand it last mile delivery capabilities.
A majority of above hires are expected to be in logistics, warehousing, supply chain, and other specialised ground level skills.
It is interesting that the actions of e-commerce companies are aligned with Mr. PM’s vision of growing skill development in India and creating more employment opportunities. If the growth of e-commerce could translate into growth of job opportunities, then may be Mr. PM should give a serious thought to allowing FDI in e-commerce.
Where do we need so many people in e-commerce?
It is an interesting thing, what starts with a lean, technology led approach, quickly translates into a large team, operationally intensive business.
Major Functions in an e-commerce Business
Web store management
Logistics and warehousing
As e-commerce is still in its growth phase, sourcing and merchandising continue to stay as critical functions. If a company needs more sellers, products on board in less time, they need a large workforce to do the job. Add overtime, once the company starts attracting sellers, the same teams shift to enablement and managing these sellers.
This is typical to a marketplace e-commerce model, and for branded retailers they already have a strong and set merchandising / sourcing function. Their e-commerce can simply plug into their existing teams
Quite unlike to typical mindset in India, that once we have made a website, why do we need continued technology team? e-commerce poses a continued requirement of technology enhancement / optimization / support. With scale, everything changes in technology. It is not justified to build a cannon for firing a bullet when Ecommerce is nascent, however as the business grows, you’re are dealing with 1000s / 10000s of orders per day, you need to go beyond a cannon. Hence for a good number of years of growth, technology grows probably at the same pace, may be faster, than other functions. Eventually, if your are a branded retailer, the technology shall stabilise, however the battle is endless for marketplace players.
Order/ Customer management
This is really the function which is hungry for people. More orders, more processes, more people to do the job. Right from order verification, address verification, coordination between various parties to deliver the order, and if there is an issue, handling and resolving the customer request.
This team is typically termed as mid and back office of e-commerce, with contact center being mid office and all other operational processes being back office.
The math here is simple, if an average customer call is about 3 mins (I reflect a high optimism) and an average agent works productively for about 7 hours (again a high degree of optimism) we are talking about 140 calls a day per agent.
At 1000 orders per day you typically would get more than 300 calls per day, with most of them asking, when will I get my order?
And the assumption above are ideal scenarios.
Evolution in technology has led to automate some processes like auto verification calls, auto confirmation calls, interactive voice interfaces for order enquiry, support request submitting, etc. which can save cost of manpower and bring higher efficiency in system.
Some companies who fail to deploy right technology in accounting systems, may need a large team just to ensure AR and AP due to multi party environment of e-commerce. Account reconciliation, payment support to parties, managing accurate accounting for individual customers are the areas that may need intense manpower. Hence our suggestion for offline retailers going online is that please look beyond Tally for your e-commerce accounting.
A Webstore or a mobile store is all you have to engage customers buying with you. Hence it demands a continued focus in many small tasks. Like banner changes, images, data information correctness, continued testing, etc.
A lot of these challenges can be solved by right and reliable technology, however a team constantly focused on looking at your store on a min by min basis, is suggested.
Logistics and Warehousing
Manpower requirement in this function is dependent on the business model you have chosen and functions you have in-sourced.
For marketplaces as they try to do most of things themselves right to the last mile delivery, the need of manpower is substantial however for brands, they can safely ride on 3rd parties to meet their delivery, and even warehousing needs.
Warehouse typically need scaling of manpower for:
Inward of goods, proportional to growth in product assortment, suppliers and variety.
Picking, packaging largely proportional to number of items per order and vary category by category.
Dispatch, proportional to number and size of boxes.
Technology can simplify the process and may reduce some manpower needs.
Amazon and some large e-commerce companies deploy robots and drones to substitute manpower. But unlike other matured markets, where minimum wages is an enforced act and wages are really not small, India still enjoys very low-cost manpower.
Managing iteration in this function is a big challenge. “Not turning up to work, one fine day” is a commonly seen phenomena.
Technology and Manpower Cost
Yes, technology is really the solution to keep your manpower needs low, realistic and further build higher predictability, efficiency in your processes. For an e-commerce business it is important to constantly identify processes that can be automated via technology.
Constant focus on technology can help you with following:
Streamline information flow across the process, making discovery easier.
Increase productivity of your existing team.
Build efficiency in execution of repetitive task.
Provide self enabled interfaces to consumers and sellers (For marketplaces).
Make your operations seamlessly scalable.
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