Abhishek has led Shadowfax to be the India’s largest crowdsourced delivery platform with presence in 70+ cities across India and 7000+ daily active delivery personnel. Shadowfax’s unique app enables delivery of food, grocery, pharmacy and e-commerce for businesses.
A friend recently recommended me a Vice Documentary, called ‘The Third Industrial Revolution’. I’d strongly recommend you add it to ‘Watch Later’.
We have diligently spent three years building Shadowfax. I felt it will be a good exercise to think how logistics and transportation might change over the next 3 years.
Here is what I see happening.
Consumer Demand for Everything, Here & Now
Millennials have changed the dining industry in China. Revenues from On-demand food delivery tripled in 2016. I expect a similar revolution in the way people order online in India. We’ll order online, expecting the delivery in a blink of an eye. Every business needs to see this as an opportunity.
On-demand delivery can open new avenues of growth. Restaurants for example, can have longer peak hours and serve customers who are too far for a dine in. By 2020, not just the restaurants but all e-commerce companies will have to think of delivery in minutes. Same Day Delivery may not be enough.
A Digital Home Run
Smartphone adoption gave a massive boost to the Indian e-commerce industry. I believe that Jio, which acquired 100 Million customers in 170 days, will add another set of wings to e-commerce. With cheap data, people simply spend more time online and are more likely to make a purchase there itself.
I’m not just talking about the mega metros but over 100 large cities that will drive e-commerce. Online retail in India is expected to grow to $ 200 Billions in 2026 from $15 B in 2016. E-commerce logistics will grow rapidly to serve this huge surge in online purchases.
Simplified Supply Chain
Currently, manufacturers and retailers manage distribution centres or warehouses in every state. These are meant to offset tax variation. With GST coming in, companies can rebuild their distribution system so that it serves customers the best.
For instance, Deepak argues that the fast-moving consumer goods (FMCG) companies can serve the nation effectively with 6 distribution centres. The companies have between 35 and 40 distribution centres currently.
GST creates an environment that incentivises efficiencies. I can imagine a future when E-commerce marketplaces may not need warehouses. Don’t get me wrong, sorting centres will still be needed. However, the goods to be sold can be stored with the merchant itself. Doorstep pickup and delivery providers will facilitate the ‘drop-ship model’, allowing direct deliveries from the merchant to the customer.
Businesses may differ on their methods to achieve better efficiency, but we’ll begin to see everyone taking an at bat.
Uberisation of Logistics
Service and Technology integrations will continue to fuel the “Uberisation” of Logistics. Across Sea & Land Transportation, logistics businesses will use mobile phones to connect with potential customers.
The relationship between businesses and their logistics partner will completely transform. We’ll witness a “consumerization” of B2B decision making. I think it makes sound economic sense for businesses to use technology to discover new logistics partners than being dependent on few.
This change will be particularly beneficial to small business, who can demand greater efficiency from their logistics’ partner.