Growing online E-commerce a boon for logistics compaines

The race to sort, package and ship millions of products that Indians are buying online is becoming a hotly contested one in the Indian logistics industry as several companies launch innovative services to grab the growing business. The lack of efficient logistics support has been a bottleneck for India’s online retail industry.Apart from tapping the large logistics market in China, Indian service providers will also be looking to pick up business from Indian MNCs like Tata and M&M who are already there.

Kathuria, a former India country director at logistics multinational TNT, said logistics companies have so far had to play catch up to meet basic requirements in this fast-growing industry. They have now established systems and processes to pick up packages from a number of sellers and ship them to multiple pin codes.

At a customer’s doorstep they pick up returns and keep the online retail firms updated on the status of the package at every step of its journey. Even cash-on-delivery (COD), which accounts for about 60% of all online retail transactions, is under control, said the companies. With competition heating up in online retail, companies have started offering services like next-day and same-day deliveries, adding to the pressures on logistics companies. The need for speed and the requirement to reach customers in remote locations is driving innovation. “If online retail has to grow to the humongous numbers everyone is talking about then logistics has to reach the smaller towns,” said DotZot’s Kathuria.

Competition to Indian logistics companies will be mainly from these global giants, as well as the many thousands of local logistics companies in China. A measure of the interest in the Chinese logistics market is the fact that the first Transport Logistic China exhibition held in Shanghai in mid ’04 attracted 214 logistics companies from 27 countries.

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