A surge in orders that ecommerce companies are expecting this festive season is sure to benefit a category of service providers: the last-mile delivery companies.
Online marketplaces are trying new tricks, including shipping directly from the merchant if the buyer is in the same city or region instead of routing though company fulfilment centres as well as short-term tie-ups with regional and intra-city logistics players. This also means a rise in short-term job openings in the logistics segment.
Companies such as Snapdeal, Flipkart, Paytm and ShopClues are working on both models, while Amazon recently announced a flex programme with a direct merchant-to-customer shipping option.
"We have tied up with around 12 regional logistics partners who are delivering products across categories including fashion, electronics, appliances, furniture and other home categories. Some of these partners are hyperlocal-specific partners, fulfilling the orders directly from seller to the user," said Ashish Chitravanshi, VP - operations, Snapdeal.
Saurabh Vashishtha, vice president of business at Paytm, said his company has close to 30 courier partners five of them national players and the rest regional ones. "We are working with merchants to tap into their logistics network for effective last-mile delivery," Vashishtha said.
Hyperlocal fulfillment and last-mile delivery, including partnerships with national logistics players, are making the festive season busy for small, regional players. "Ahead of the Big Billion day sale at Flipkart, we are working on a contractual agreement to fulfill last-mile delivery of appliances from the fulfillment centre in the city," said Srinivas Madhavam, founder and CEO of VDeliver, a two-year-old logistics player with operations in Hyderabad and Chennai.
Though it refused to comment, according to people in the know, Flipkart is also working with merchants to ship orders directly to consumers in Bengaluru using last-mile delivery services to reduce the order cycle.
Samir Kumar, VP of category management at Amazon India, said his company's service-partner programme for last-mile delivery, among other resources, uses local distribution networks to reach remote villages. Direct delivery, though, forms only a small part of the business for ecommerce firms.
"Close to 4% of our orders are fulfilled directly by merchants to customers. This is especially relevant in case of products which require installation services, such as appliances," said Radhika Aggarwal, chief marketing officer at ShopClues.
The model is expected to grow, though currently the players are focused on getting the logistics right for this festive season. In order to meet increased demand for delivery personnel, regional players have been building capacity through part-time and temporary staffing.