This season of the festival will be about the need for speed, as ecommerce majors have entered the paradigm of fast delivery (same day or next day), pivoting from their original time of 4-5 days.
Making the release game harder to play will be fast-selling players who are expected to capture the majority of consumers looking for instant gratification. All in all, ecommerce platforms will be seen upping the ante in staying ahead of the shipping curve and ensuring that no shopper is left wanting in the rush of the game.
However, this shift in ecommerce trends has been in the making for some time, and the catalyst has been the growing Indian fast-paced publishing ecosystem, which currently drives 40% of online grocery sales.
In the past year, ecommerce markets have made great strides in improving delivery speed, introducing same-day and next-day services to meet customer needs. A striking example is Flipkart, which, at the beginning of the year, announced that it would offer same-day delivery for many of its brands at no additional cost.
With the market at risk, Amazon also followed suit, while beauty platform Nykaa and fashion site Myntra began testing same-day options. To witness this, many D2C brands are adapting to stay competitive.
While they may not match the online markets in terms of order, they wish to offer quick delivery options to stay competitive. The case in point is GenZ-focused fashion startup NEWME, which recently rolled out 90-minute delivery for its products in select areas of Delhi NCR.
Speaking to Inc42, logistics experts said that the demand for fast delivery has increased significantly compared to last year’s sales. Same-day and next-day shipping grew 4-5X during peak retail sales, now accounting for 12-15% of total ecommerce sales, which is a huge jump from almost zero 18 months ago.
This increase comes as ecommerce firms like Amazon, Flipkart, and Meesho are expected to register a 20% year-on-year rise in sales prices, generating sales in the range of INR 1 Lakh Cr to 1.2 Lakh Cr this festive season, according to sources. to Redseer Strategy Consultants. Fast trade is expected to contribute around 8% to this growth.
Festive Rush Makes Way to Survive 5X in One Day Shipping
Speaking to Inc42, COO of Ecom Express, Vishwachetan Nadamani, said that during the holiday period, the speed of delivery is often due to increased demand, with trucks carrying lines operating more frequently. However, the increase in requests for quick delivery is particularly pronounced this year.
Therefore, the manager added that the company has launched same-day delivery and next-day delivery in top 10 Indian metro cities, with fully established facilities to support these services.
Meanwhile, Shadowfax’s co-founder and chief business officer, Praharsh Chandra, said the company is ready to do the same if the next day runs.
“We started focusing on fast delivery by brands and markets about a year and a half ago. Back then, the industry delivered 0% in one day, but now 10-14% of all orders within the city are delivered in one day,” said Chandra.
Chandra noted that this trend is increasing as we approach the peak selling season. “In fact, our same-day delivery channel saw a five-fold increase in one day, on the second day of sales. We hit a peak,” he said.
Chandra sees a clear change in customer behavior here, with more and more satisfied customers there. “Even for nearby places, like orders from Bangalore to Mysore, which used to take two days, people expect delivery the next day,” he said.
The sentiment is being expressed throughout the industry. For example, Zipee’s founder & CEO, Madhav Kasturia, sees subscriptions 6-8X growing as all of their partner brands continue to expand during the holiday season.
Fast Delivery Fever Grips All Categories
Fast delivery demand is up in droves this holiday season. Electronics, beauty and personal care, fashion, and home goods saw strong interest, with mobile phones being the most popular choice. Interestingly, on the first day of sales, Shadowfax delivered 15,000 iPhones.
However, the area of interest is not dominated by electricity alone. Categories such as beauty and personal care, fashion, and home goods are also seeing strong demand, with brands such as Decathlon experiencing increased sales of sporting goods, indicating that consumers are diversifying their purchases.
“There is demand in different sectors. However, it is important to look at where this demand is and if brands have optimized their supply chains and warehouses in these top metros,” Ecom Express COO said.
So far, the demand for fast delivery has been high in metro cities like Bangalore, Mumbai, and Delhi. However, this trend is not limited to cities. The facilities are now transporting grains in Tier II and Tier III cities like Patna, Jaipur, and Guwahati to provide faster delivery options in these regions as well.
Facilitating the Difficulties of Rapid Release
While fast delivery services are in high demand, they come with operational challenges. One of the biggest challenges is managing the placement of items. Fast delivery requires not only fast transportation but also strategic positioning of the inventory close to the customers.
This requires keeping a few pin codes at the dark store, which is a difficult thing, Zippee’s Kasturia said, adding that the first thing was to fix and set up local hubs, making it possible to get fast and organized delivery methods.
In addition, the ever-increasing demand for same-day delivery translates into increased demand for delivery drivers, resulting in higher prices month over month. During peak seasons, volume can increase by 4-5X, necessitating increased capacity through hyperlocal delivery fleets.
“Historically, products have a complex model where shipments from many customers are picked up, sent to a central packaging area, and then sent to the last mile hubs. The whole process took about 16 hours. But for one-day delivery, we cannot afford such a delay. So, we have reorganized the chain of distribution to bypass other nodes where possible. This is a technical and operational change,” Shadowfax’s Chandra said.
While same-day and next-day shipping typically carry premiums — around 25% higher than express delivery — premium products are working hard to increase operating costs. By increasing order volumes and streamlining their processes, many have reduced the price difference to 5-10% compared to normal deliveries.
Now, as the industry stands at the stage of fast-moving manufacturing, building a well-designed supply chain will be a priority for the long-term stability of India’s fast-moving manufacturing nation.
[Edited By Shishir Parasher]
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