![\"Market_Place-1\"](\"http:\/\/rai.net.in\/blog\/wp-content\/uploads\/2013\/12\/Market_Place-1.jpg\")
<\/a><\/p>\n\u201cThe play for any express logistic service provider, within ecommerce, is in the non-travel vertical. Since the entire gamut of e-commerce is not addressable for us, Blue Dart has identified the e-tailing market. By creating simplified solutions for our customers, we have a dominant market presence.\u201d Says Anil Khanna, MD, Blue Dart Express Ltd.<\/p>\n
E-tailing in India has taken off on the back of Cash on Delivery.\u00a0 Credit card penetration is still less than 30% (at a population level) and there are concerns about revealing card details online.\u00a0 Cash on delivery ensured that customer adoption of e-commerce was high \u2013 but it also increased the operational load on the e-tailer and the logistics partner.\u00a0 At the same time, COD provides companies like DHL with a platform to differentiate themselves:\u00a0 they are able to demonstrate better control over key risk points such the inherent risk of fraud, counterfeit, mutilation and theft.<\/p>\n
\u201cIn order to cater to the demands of the growing e-tailing industry, Blue Dart introduced the COD service as an additional payment option to customers. The invoice value of the shipment is collected from the consignee in the form of cash at the time of delivery. The cash collected from the consignee is returned to the e-tailer to close the transaction thus completing the entire system.\u201d<\/p>\n
Blue Dart has partnered with Yes Bank to offer MPOS solutions \u2013 a mobile device based GPRS connectivity to facilitate debit\/credit card payments.\u00a0 This POS device when connected to any smartphone device can be used as a POS terminal to facilitate card payments.<\/p>\n
Coverage v.s COD v.s. Logistics model<\/h2>\n
For e-tailers coverage is the key to growing sales.\u00a0 While full service logistics providers like Blue Dart cover most of the cities and towns, for regions below the Taluka level,\u00a0 they still need to tie up with local service providers.<\/p>\n
This has meant that e-tailers have to manage multiple partnerships and balance growth with operational efficiency.\u00a0 Out of this compulsion a natural progression of inventory models (and the corresponding logistics partner) has emerged: Anil says, \u201cThe most common business model is the vendor based business mode; \u00a0as it is not very capital intensive. After receiving a set number of orders, the e-tailer purchases products from a local distributor, and then transports them to his own facility for packing and shipping. The advantage is that the e-tailer doesn\u2019t have capital tied up in inventory or unneeded warehouse space, has all the shipping records on hand, and has a good idea of the distributor\u2019s stock. The disadvantage is that the e-tailer is very dependent upon his distributor\u2019s supplies, and may not be able to accurately reflect available inventory to his shoppers before they purchase.\u201d<\/p>\n Warehousing is another business model followed by e-tailers. As the e-tailing business grows in revenue as well as product offerings, e-tailers prefer to switch to the warehousing model where the e-tailer develops its own warehouses to store inventory and is ready to dispatch as soon as he receives an order. \u201cThis approach is investment intensive, since e-tailers are paying for both warehouse space, and have capital tied up in inventory on the shelves. But it allows the best quality of customer service, since shipping and inventory records are maintained in-house.\u201d, says Anil.<\/p>\n The choice of model depends largely on the size of the company and the amount of capital available; while large, well capitalized e-tailing players (e.g. Flipkart) have their own logistics divisions, the smaller ones work with multiple logistics providers. As the e-tailing industry is slowly pivoting to a marketplace model \u2013 most mid sized e-tailers are choosing to outsource their logistics to a market place model.<\/p>\n Logistics companies also have a \u201cIn today\u2019s competitive landscape, while a self-owned logistics system may be a key differentiator, it\u2019s not clear whether it will be a long-term solution, or a one size solution that fits all. Developing a self-owned logistics network entails a huge investment, besides requiring automation, innovation, investment in IT and also sufficiently trained staff, which should be able to provide value-added services to the network.\u201d \u00a0– he explains.<\/p>\n This is an interesting \u2018take\u2019 on the market trend where companies like Flipkart have chosen to invest in the Logistics side of the business. Time will tell whether the move will enhance their valuation or whether they would have been better off continuing to work with multiple national and local express logistics partners. The integration of technology on varied fronts adds to efficiency and visibility for the e-tailer. So what does Blue Dart have to offer on the technology front?<\/p>\n Blue Dart’s technology solutions have seen a high degree of customer adoption. 79% of Blue Dart’s regular customers use one or more of their solutions.<\/p>\n Home grown innovations like the COSMAT II\u2122 (the tracking and ERP system), TrackDart\u2122 (monitoring shipment status), MailDart\u2122 (tracking shipments over e-mail), InternetDart\u2122 (memory bank for shipments), PackTrack\u2122 (tracking software for medium and large customers), ShopTrack\u2122 (tracking and CRM tool for e-business portals), ImageDart\u2122 (online download of proof of delivery challans\/documents, to speed up the customer’s bill process, waybill issuance capability, customer directory, data upload and download of tracking information), among others have enabled the weaving of thoughtful information management into the logistics business.<\/p>\n The graphic summarizes the key impact areas \/ KPI\u2019s of the express delivery service \u2013 for a e-tailer:<\/p>\n<\/a><\/p>\nRange of Logistics options<\/h1>\n
<\/a> natural hierarchy in the industry.<\/p>\n\n
E-Tailer or Express Company?<\/h1>\n
<\/a><\/p>\nTechnology<\/h1>\n
Service Impact<\/h1>\n