In a bid to stay ahead of other e-tailers, home-grown online shopping major Flipkart is all set to introduce three hour delivery-system of products to its consumers in next six months, says a report in Economic Times.
As per the report, it is expected that this ultra fast delivery will start in the coming six months. Besides, the company is figuring out the cost considerations, appropriate product categories and cities to roll out this service.
Commenting on the matter, Sujeet Kumar, Head of WS Retail and ekart Logistics, told Economic Times: "We have to figure out the technology, pricing for these services. Such deliveries are necessity driven say a thing a customer wants to gift or something he needs immediately.''
Kumar declined to put a specific date on when the logistics arm, ekart, could start with this service.
'Flipkart has to offer a viable business model because it (3-4- hour delivery) will be expensive for the customer," Kumar told ET in an interview last week. However, ET learns it could start with some products in 3-4 cities as early as July.
"The kind of data we have is much richer than, say Google Maps," said Sujeet Kumar, adding that the company will start deploying more technology as it focuses on providing value-added services, including faster delivery, as it seeks to edge past competition.
Indian e-commerce industry has rapidly grown in the last few years.
At present, the three top online retail firms Amazon India, Flipkart and Snapdeal offer same-day delivery in big cities for a fee. These firms male delivery next day for free in major cities but deliveries can take longer outside these areas.
As per the industry experts, speedy delivery service will be a game changer in the fiercely competitive e-commerce space. Reduced shipping time to a few hours will definitely attract more users. Besides, this will encourage other e-tailers like Amazon India to bring in the service to the country, as its parent ships goods to consumers in New York in 60 minutes for a fee.
However, there are more challenges to overcome in order to make faster delivery.
"There are two important things retailers need to get right to make this work. First, they need to select a small subset of their offerings which are available with these time frames. Second, meeting this delivery promise requires organisations to build very different logistics and operational systems than those necessary for traditional delivery route-based delivery systems For instance, retailers may need to have many more warehouses in central parts of the city to make these work," the ET report quoted Karan Girotra, professor of sustainable development at Insead.
Flipkart makes same-day delivery across 10 cities. The company has a large logistics and delivery team in place. Flipkart operates through 13 warehouses and over 12,000 people involved in the delivery system.
Girotra believes that the marketplace model may make it difficult to bridge the time barrier. Players with marketplace-based models will find it tough to make it a reality. For the firms with this business model, delivery often involves taking purchased items from a third-party location.