Thousands of
products from e-commerce companies such as Amazon, Snapdeal, Flipkart,
HomeShop18, Shopclues, Naptol and Yepme are reaching the remotest
corners of India everyday, owing to their last-mile partnership with
India Post, the government-operated postal network. On its part, India
Post transacted business worth Rs 500 crore in cash-on-delivery alone
for e-commerce players in 2014-15. Its revenue from this business rose
from Rs 20 crore in 2012-13 to Rs 100 crore in 2013-14. But that’s just
one side of the story.
To reach as
many customers as possible at the fastest pace, even if it means getting
drones to do the job, online retailers are learnt to be coping with the
infrastructure hurdles of India Post. In fact, many leading companies
are said to be directly in touch with Union minister of communications,
Ravi Shankar Prasad, as well as senior bureaucrats in the ministry, to
resolve last-mile issues.
While
e-commerce companies tied up with India Post to reach India’s interiors
and access pin codes that no courier company could, this has helped them
only in a limited manner. On bicycles, India Post delivery men hardly
match courier boys on motorbikes, who are faster and are also able to
carry heavier parcels. Some postmen have to walk on rough terrains to
reach distant addresses with parcels containing anything from mobile
phones and apparel to fancy accessories and kitchenware.
A senior
Snapdeal executive told, “As most of the India Post team uses bicycles,
we have ensured products weighing less than five kg are routed through
them for delivery.” Against that, a courier delivery boy often carries
parcels 10 times the size, according to industry sources. An Amazon
spokesperson said, “We appreciate and understand that the last-mile
delivery methodology of India Post is mostly on bicycles and we are in
discussions with India Post to come up with a solution/delivery
methodology for large-sized Amazon packages.”
Flipkart did not respond to a questionnaire on the issue.
An official at
India Post said the department was gearing up for the challenges and
infrastructure was being upgraded. The department has already generated
substantial revenue from its tie-up with e-commerce companies. While
there’s no word yet on replacing bicycles with motorbikes and on whether
the current India Post delivery staff, typically much older than those
employed by private courier companies, are ready for the change, the
official said logistics could be outsourced to a third party for
delivery of goods, depending on volume.
Currently, the
slow mode of sending parcels via India Post to pin codes unheard of is
upsetting the sales targets of top e-commerce companies, for which every
missed delivery could translate into a lower GMV (gross merchandise
volume) and valuation. Also, it could mean missing the next round of
funding from a marquee investor.
There are other
issues, too. For instance, a Bengaluru-based online
retailer-cum-stylist had partnered India Post in 2013. However,
according to its co-founder, the two-year-old company had to discontinue
the arrangement after it was found postmen were seeking money from
customers for deliveries to remote areas such those in the Northeast.
“Such incidents are serious enough to malign the reputation of a
company,” he said.
Another challenge is the India Post delivery team doesn’t get any volume-based incentive because it’s a government organisation.
On the other hand, private courier companies were often enthused by such offers, an official said.
The fact that
70-80 per cent of orders for companies such as Flipkart and Snapdeal are
from non-metro areas shows how critical it is for them to compete in
the remotest parts of India. Amazon, for example, took pride in saying
it had delivered a parcel to pin code 790002 — a destination called
Balemu in Arunachal Pradesh’s West Kameng district.
The dark side
of the e-commerce revolution is equally real. A recent Wall Street
Journal report had highlighted the plight of courier boys carrying
parcels weighing 23-46 kg in large backpacks day after day, all for a
monthly salary of less than Rs 10,000. “This low-tech army of urban
sherpas hauls bags of online purchases down narrow alleys and up flights
of stairs, lugging everything from laser printers and kitchen
appliances to cans of Coca-Cola for their country’s burgeoning consumer
class,” the report had said.
Source:http://www.closevoice.com
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