Long-term partners offering a complete bouquet of services in logistics: Global Ocean Group
Long-term partners offering a complete bouquet of services in logistics: Global Ocean Group

Logistics, the back bone of the retail industry (including eCommerce) has seen significant leaps and bounds along with the evolution of the retail landscape. Currently India spends around 14.4% of its GDP on logistics and transportation which is way more than spent by other countries.

Tapping upon his lucrative space of the business, many Indian as well as foreign companies have stepped into the logistics game but, the industry still needs to work upon its loops holes including education, training and policy structure in order to propel.

Retailer Media caught up with Brijesh Lohia, MD, Global Ocean Group (startup providing door to door delivery solutions in all modes of transport from international freight to local transportation facility including custom clearance, warehousing, transportation etc.) and shared his vision towards the estimated future growth of logistics and its main demand drivers in the country.

How was the idea of your Start-up conceptualized? What is the need you are addressing in the market?
Global Ocean was a company which offered only Custom Clearance services from its inception in 1994. However, as the business and the industry requirements grew in India we evolved ourselves to offer everything under one business identity. Today, we cater to all logistic requirements of our clients, starting from customer clearance to warehousing. Our solutions have been upgraded in sync with the requirement of our clients spread across different industries and sectors.

Take, for example the sudden spurt in demand for logistics from the startup sector in India. Logistics forms the backbone of the any startup company, and it is the phenomenal growth in this sector which we aim to target locally. At, Global Ocean we provide a comprehensive solution, where a client can totally depend upon us for their complete supply chain management, or logistics handling.

Recently government is planning to cut down the time for clearing export and import consignments by half, what are your views?
Any initiative by the government in reducing the time to give clearances at the port will only help in creating a more favourable business climate in the country. It will also ease the pressure on the traders, and further boost the growth in export and import exchange.

What are the recent trends future outlook of SCM  & Logistics industry in India?
According to the India Logistics Expo 2016 report, the Indian logistics market recorded US $104.10 billion revenue in 2014, and is likely to reach revenues of US $150-$160 billion by 2020.Transportation accounts for about 60 per cent of the market revenues.
A strong point to be noted here is the logistics services getting a push from the ‘Make in India’ vision of the present government. The manufacturing sector growth will lead to a corresponding growth in infrastructure sector, as well as ensure a smooth upward movement for the logistics sector. As further quoted in the report, the total market opportunity for the project logistics services in India is estimated to be $150.86 billion for the 2014-2019.
Erstwhile, another sector which is contributing significantly to the growth of logistics is the supply chain management (scenario) in the startup sector. According to a report in KPMG, the logistics sector specific to e-commerce retailing in India was valued at USD0.2 billion in 2014 and is projected to witness a CAGR of ~48 per cent in the next five years.
One needs to understand that the startup sector is hyper competitive and to match competencies, a startup needs to be backed up by a robust supply chain. This will ensure faster delivery of goods and better lead times.

What is your Business Model?
Global Ocean Group is now a business service providing complete logistics management for your company. In other words, it takes care of A to Z requirement of a client’s logistics demand- starting from pick up of material from ex-factory anywhere from the world and provide the logistic services along with custom clearance, transportation and warehousing for importers and exporters i.e  door to door delivery of the goods.

Who is your target consumer? Could you please share how you have detailed your consumer?
Our current client base is spread across the manufacturing and retail industry. We hope to penetrate deeper into the market with the growth in the E-commerce sector.

What is your current distribution in Brick and Mortar space? What are your future distribution plans?
Since Brick and Mortar format occupies the largest space in the warehousing segment, it naturally forms an important share of our revenues. Also, there are many retail stores stepping up their presence online, which presents a great opportunity for us to tap the shift at the right time. Also, these retailers are heavenly engaged in the import and export exchange of goods. We are their long-term partners to offer them a complete bouquet of services in logistics management.

Have you raised any funding so far? What are your plans to use this funding for?
We have not yet decided to raise any funds from banks or any private equity. However, in future if we need any funds for an expansion then will decide it later.

Where do you see this industry 3-5 years down the line?
Logistics management as an industry is bound to grow by leaps and bounds for different reasons. One, the share of organised retail is only expected to grow. The Boston Consulting Group and Retailers Association of India published a report titled, ‘Retail 2020: Retrospect, Reinvent, Rewrite’, highlighting that India’s retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015.
Also, as per a KPMG report, the penetration of online retail in the total retail market is expected to rise from 0.5 per cent in 2014 to 3 per cent by 2020. Of the total organised retail market, online retail penetration is likely to increase from 6 per cent in 2014 to 14 per cent by 2020, which is comparable to the current penetration of e-commerce in the U.S.
Also, the present government has been pushing for growth in the Indian manufacturing and the startup sector. There have been notable measures taken to give an image makeover to the industry-for example, the stressing point of ease of doing business in India. This will only help us achieve more to deliver better.

What has been your A-ha Moment in the business? (The high point)
Our growth from a customer clearance service provider to having evolved in to a complete logistics solution service is our biggest moment. The A-ha moment of course is the opportune market time in which we have developed ourselves. And it is only expected to grow.

What has been your biggest challenge so far in scaling -up? How are you addressing it?
The rise in the clients demand-coming from different set of companies has helped us build our core. I think building up a strong network of clients, our team, and the technological capabilities-required us to be on our toes all the time. We are confident in our set up today and are up for any challenge which the industry throws

How do you see growth scenario is this business? What are your future scale-up plans?
As mentioned earlier, we are very optimistic in the potential growth of logistics business in India. It is being propelled by the growth in the retail, manufacturing, and e-commerce industry. New models are emerging, and we only hope to gather internal steam to keep up with the challenges ahead.

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading