LogisticS firms are now eyeing the R55,000-crore online retail industry to provide specialised warehousing, packaging and delivery services, but large e-commerce companies are up in arms against them, saying such third-party services would only benefit smaller e-tailers.
On Monday, DTDC Courier & Cargo launched its logistics firm for e-commerce ? DotZot ? across 2,300 cities. ?E-retail needs a focused, different and innovative approach for order fulfillment. DotZot will be decisive for merchants who are looking at growing and retaining their e-powered customers,? said Sanjiv Kathuria, CEO, DotZot.
Vineet Agarwal, joint MD, integrated supply chain and logistics solutions provider Transport Corporation of India, said although e-commerce services form a minuscule part of the group?s revenue, the company is now looking to invest more as it is a ?high-growth? area.
Online retailers such as Flipkart, Jabong.com, Myntra and Yebhi.com already have their own logistic units and take little service from a third party.
When most e-commerce firms started strengthening operations five years back, they received minimal logistics support from third parties, which led them to build on back-end infrastructure in the form of warehouses and delivery systems.
An executive at India?s largest consumer e-commerce company Flipkart said third-party logistics is not useful for them in the immediate future as they already have a system in place.
?Logistics for online players is different from the usual as cash-on-delivery, parcel tracking and timeliness are important aspects,? he said.
Bangalore-based Flipkart started a unit in 2010 for handling everything from packaging to delivery and employs about 2,000 people for its logistics services.
Typically, online retailers spend about 7-10% of their total costs on logistics, varying on the number and size of transactions. Manmohan Agarwal, CEO, Yebhi.com said, ?60% of our logistics is done internally, and we intend to increase to 80%. We are not planning to give more business to a third party.? At most times, the external services are poor and expensive, he added.
Meanwhile, smaller firms in the fray will be able to use third-party logistics built especially for them. Vikas Chawla of online shopping portal KoolKart.com is of the view that smaller firms have little or no logistical support. Such services is must for smaller players, he said.