The supply chain of D2C brands is different from traditional businesses. A D2C brand uses a single or few specific locations for storing its products and ships the products directly to its consumers. This enables D2C businesses to sell their products to customers at a lower price and to maintain end-to-end control of their supply chain. Hence, a D2C business needs a liable and cost-effective supply chain right from the beginning. Here the EV-based supply chain plays an important role since the overall running costs as well as maintenance costs for EVs are significantly low as compared to the ICE vehicles. This reduces the cost of deliveries which in turn brings down the operating costs for the D2C companies.
Adoption of EVs by D2C Businesses
The pandemic has accelerated the growth of online businesses as people are now more reliant upon e-commerce platforms for regular purchasing of products. This has ultimately raised the demand for 2-wheeler and 3-wheeler vehicles in the logistics industry. As D2C brands sell their products in small packages at a lower price, they always look for cost-efficient delivery methods to gain profits in their businesses. But, the continuous rise in fuel price has become a hurdle. Therefore, platforms such as Amazon and Swiggy have adopted electric vehicles for their last-mile delivery of products. Also, EVs are eco-friendly vehicles that help in lowering the carbon footprints on the planet. The electric vehicle industry in India is projected to reach around $16 billion by 2027, growing at a CAGR of 47 percent in the forecast period (2022-2027).
How EV is Easing Supply Chain for D2C Brands
There are around 800 D2C brands pan India, but inefficient supply chain management and logistics operations are creating hindrances in their growth. But, the advancement of technology has aided many brands in improving real-time data by errorless tracking of stock availability and delivery options. Technology such as geofencing is enabling D2C businesses to keep track of vehicles and their riders. Many prominent platforms such as Delhivery, Shiprocket, and Unicommerce are providing their warehouse management services to D2C sellers. This solution has become helpful in streamlining the supply chain of D2C brands.
Impact of EV Technology on Business ROI
Though EVs are new in the market, the technology is promising. The transition of fleets to EVs provides businesses with a credible role in reducing global greenhouse gas emissions and inspiring wider EV adoption across society. As we are aware of the fact that a fleet of EVs is helpful in lowering CO2 emissions, they also save money on fuel expenses. EVs save around 40 percent of the delivery cost as compared to traditional internal combustion engine (ICE) vehicles. According to industry trends, there is a high potential for growth with EVs in the long race. Emerging businesses in this segment are expecting ten times profit projection with the help of EVs. With increasingly stringent government regulations, 30 percent of fleet owners are now considering the adoption of EVs in their businesses. Also, EVs are inherently more reliable than ICE vehicles as they demand low maintenance which makes them a viable and cost-efficient option for businesses.
Though EV technology is still at a nascent stage in India. The only way which can be helpful for EV-based businesses is the adoption of EVs on a large scale. The central and state governments in India are promoting the adoption of EVs through flagship schemes. FAME (faster adoption and manufacturing of electric vehicles) is one such scheme that is currently in its second phase with a budget allocation of Rs 10,000 crore. The global pandemic has disrupted businesses around the world. Therefore, platforms like Amazon and Flipkart have started managing all aspects of warehousing, fulfillment, and end-to-end delivery. In the coming few years, D2C brands will reach a figure of $100 million in terms of sales. However, the D2C businesses need to ensure every aspect of their product delivery - from marking to packaging to reaching customers' doors. This whole process demands cost-effective and efficient supply chain management that aids in lowering customer acquisition costs and delivery time without compromising the conversion rate. And, adoption of EV technology by D2C brands is a positive step in this segment.