Last Mile Delivery in India

What is Last Mile Delivery  ? :

• It is  the last stretch of a B2C( Business to Consumer) parcel delivery to the final consignee who has to take reception of the goods at home or a collection point.

Importance of Last Mile Delivery ? :

For any E-commerce firm LMD plays a crucial role in determining profitability. The major cost incurred by sites is during LMD. Therefore it needs to be understood and perfected to ensure smooth sailing.

Two more reasons why LMD is so important :

1) If you mess up a delivery , chances are that you might alienate that customer and the people they would have recommeded it to would also be lost.

2) This results in negative attitude towards your brand.

Last Mile Delivery In India : Let us take the example of FLIPKART.

 

1.3 Cr clicks in 2011 to 11 Cr clicks in 2012. Revenues have grown from 4lacs  to 500cr  within 5 years. Nearly 60 to 70 per cent of deliveries take place through their own network.

 

We can see from the Bar graph , customers prefer Home Delivery as well as other options .

What is the Flipkart Strategy ?

qConventional Home Delivery - Using self and private courier services.

qWarehouses for certain goods like books. In major cities delivery is the direct responsibility of Flipkart – 35 such centers around India.

qContract compliance with dealers across the country for electronic goods.

What are the persisting problems for flipkart ?:

What improvements are suggested ? :

www.chhotu.in is an Indian website specializing in LMD for ebiz.

Packstations: These are localized protected collection boxes where parcels can be deposited by the ebiz and the customer can then go enter a security pin and remove his parcel. This saves cost and time for the ebiz and gives convenience to customers to collect at the time they are free.

Seeking to provide a better access for customers 

to their parcels, Deutsche Post DHL developed the 

Packstation system. Since its inception in 2002, 

it has offered a wide selection of services, from 

delivering shipments to picking up parcels around 

the clock and franking.  

For parcel services, customers have the choice to 

have their shipments delivered to the Packstation, 

so the parcel is no longer brought to the customer’s home address but can be picked up individually. 

Clustering is the concept of delivering the parcels to a local point such as a petrol pump or a supermarket and the customers can collect parcels from there. Benefits are similar to those of Packstations.

 

qMajor Chinese e-commerce giants like Taobao.com are overcoming their last mile delivery issues by :

•Building and expanding their own internal Logistics networks.

•Outsourcing to third party express companies & Forming partnerships / acquiring existing firms.

The graph below shows the economies of LMD :  

The graph shows that if few parcels have to be delivered , then the cost for LMD by company itself is much higher than if it is outsourced to 3rd party companies.

What are your thoughts on Last mile Delivery scenario in India? Post your Ideas by commenting !