Niche online retailers are building their own logistics and delivery networks for cost optimization, taking control of each step from order processing to shipment.
Niche online retailers are building their own logistics and delivery networks for cost optimisation, taking control of each step from order processing to shipment.
Furniture etailer FabFurnish recently launched its logistics service Fabone, similar to that of competitor UrbanLadder.
Online baby-care retailer FirstCry is also looking to scale up its logistics arm Xpressbees for taking third-party orders while Faaso's current model focuses more on streamlining the delivery aspect of food-on-demand.
After spinning off its medical business as 1mg, wellness etailer Healthkart has also built its own distribution network in six cities and plans to expand it to ten cities by the end of this year. "We started working on our own logistics model by the end of last year and it eases the reverse logistics. We also use the distribution hubs to supply to offline stores and trainers who sell our private label in sports nutrition," said Sameer Maheshwari, founder of Sequoia and Intel Capital-backed Healthkart.
Furniture and food delivery are two niche categories where the requirements for logistics and deliv ery are different from that of other ecommerce players.
"In case of furniture, the volume of shipments and underdeveloped surface logistics network are a challenge. Similarly, in the food and grocery industry, the turnaround time has to be less," said Manish Saigal, MD of consulting firm Alvarez and Marsal.
Drawing parallels with Flipkart's logistics arm Ekart, which was developed to improve efficiency, Saigal said that the services are usually restricted to areas in metros that generate high volumes. "In order to run profitably, Ekart had to depend on third-party customers for better loads. Increasingly, Flipkart is moving to third-party logistics players for bulk of its shipments as number of orders from Tier-II and III cities increase," he added.
Mehul Agrawal, founder and MD of FabFurnish said the company currently processes 40 per cent of its shipments through FabOne, which also ensures that the furniture is assembled at the time of delivery.
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