Snapdeal's GoJavas pilots local commerce

GoJavas, the logistics company backed by ecommerce entity Snapdeal, will now offer local delivery services for businesses such as grocers, supermarkets and drug stores, leveraging a network it created to enable customers to return goods ordered online.
Snapdeal's GoJavas pilots local commerce
GoJavas, the logistics company backed by ecommerce entity Snapdeal, will now offer local delivery services for businesses such as grocers, supermarkets and drug stores, leveraging a network it created to enable customers to return goods ordered online.
The new offering, which GoJavas calls 'local commerce,' currently operates as a pilot project in 15 cities and is targeted at businesses that need to fulfill orders from customers in the neighbourhood or elsewhere in the city.
Logistics companies are starting to provide local-level services as customers demand faster delivery of goods. Flipkart, India's biggest online marketplace, recently announced plans to compete with on demand players that promise delivery within an hour.
GoJavas, which ships goods for Snapdeal, Lenskart, Jabong and other ecommerce companies, recently started a service to pick up goods for return to online retailers within 90 minutes of customers making a request. This will now be used to offer local deliveries.
"Ours will be a point-to-point delivery model for business to serve other businesses or customers," said Vijay Ghadge, chief operating officer of GoJavas. "The revenue will be generated from businesses using our service for delivery...Initially, the timeline will be 90 minutes and we will extend cash-on-delivery for these orders."
The local commerce arm of GoJavas will utilise the staff of its 'Go-90' service, who pick up goods to be returned, to also carry out delivery for businesses. Currently, there are 1,500 people employed in 15 cities where this service is available, including New Delhi, Mumbai, Bengaluru and Hyderabad.
"Businesses will range from groceries, food to medicines," Ghadge said, adding that GoJavas will set up a separate fleet to transport high-volume orders such as groceries, apart from the two-wheelers it currently uses. The pilot project will be expanded to 40 cities by the end of 2015.
GoJavas has roped in Sobhit Jain, previously with Accenture as a principal for supply chain consulting practice, as general manager. The logistics company will continue to work with its partners, apart from signing on new online businesses requiring local delivery services. Snapdeal had picked up a minor stake in GoJavas earlier this year, investing Rs 200 crore in the Gurgaon-based company, which was earlier a part of Rocket Internet-backed Jabong's inhouse logistics arm.
While GoJavas is looking at this service as an extension of its network, the space is markedly different from the typical e-commerce delivery model. Realisations from delivering goods within a city or neighbourood - also known as hyperlocal delivery - are only as much as one-third that of a national delivery network.
"The unit economics for hyperlocal delivery are quite different from regional or pan-India delivery," said Manish Saigal, managing director of Alvarez & Marsal, a global business services firm. "Orders in hyperlocal delivery, especially in grocery, involve larger volumes, heavier weight and require different capabilities. Delivery time is getting shorter to a few hours instead of a few days."
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