With “reaching the last mile” included in the seven priorities of this year’s Budget, shipping logistics solution and courier service aggregator Shiprocket is hopeful of the sector picking up speed in the year ahead. In this interview to Alokananda Chakraborty, CEO and co-founder Saahil Goel talks about ways technology is changing the business of e-commerce fulfilment.
Edited excerpts:
Shiprocket acquired Wigzo Tech, Glaucus Supply Chain Solutions and Arvind Ltd’s Omuni last year. How have these 3 acquisitions helped Shiprocket to scale up?
We are a complete customer experience platform for SMEs, D2C retailers and social commerce sellers in India. Our mission is to democratise e-commerce by creating a simple, open and enabling platform for every independent business of the real Bharat. A level-playing field for online commerce is necessary for entrepreneurs of all sizes to flourish and this will create a robust entrepreneurial ecosystem in the country. We are impacting sellers’ lives by making quick and frictionless tech-solutions for them. Each brand we’ve partnered with solves a unique problem. For example, Omuni’s SaaS products allow merchants to unify inventory, order, catalogue, content, pricing, and data across physical and digital storefronts, providing the best possible omnichannel e-commerce experience to the customers. Similarly, Glaucus’ fulfilment network enables a boost in speed, accuracy and efficiency, especially with the increasing consumer demand for quick deliveries. Wigzo, on the other hand, helps in enabling a personalised consumer experience with big-data analysis and AI-powered automation.
Shiprocket posted a loss of Rs. 93 crore in FY22 against a profit of Rs. 12.4 crore during FY21. Do you hope to return to profitability in FY23 with the end of the one-time costs on acquisitions, fundraising and the high cost of packaging that affected you most of FY22?
With all the new partnerships, we are building synergies. We are definitely projecting a return to profitability in the coming year.
What are the primary challenges for D2C-focused logistics firms in any case?
Earlier, there was no infrastructure for customers to fulfill the orders once they placed them through social media or the seller’s website. Sellers often had to rely on big e-commerce platforms to do the fulfillment for their marketplace. They didn’t have a platform to help with direct orders shipped straight to the customers. We started by solving this issue by assisting them in getting their business online by removing all the middle barriers, which made Shiprocket an all-in-one solution for them. We suggested the optimal logistic mode customised to seller needs and offered them incentives like discounts, early COD, and so on.
The other more prominent challenge that all e-commerce brands/sellers face in India is high RTO rates. All sellers, big or small, face considerable losses due to COD orders that are shipped but not delivered. Most sellers follow manual processes to review and filter orders to prevent excessive RTO losses. Brands have been facing multiple hurdles due to the lack of a robust system to flag orders with higher RTO risk. As an automation suite powered by an AI system trained on over 1 billion data points, Shiprocket Engage automatically flags orders with high RTO risk and provides a seamless post-purchase experience for end customers by reducing RTOs significantly and improving their profit margins.
Dark stores and drones are an emerging e-commerce shipping trend. Your views please.
The incorporation of drone technology in the logistics sector has been an ongoing conversation for the past few years with players running successful pilots in the west. With the integration of 5G technology, this will become even more seamless and doable.
In a country like ours, where the demand for faster deliveries is on the rise, logistics players will have to come up with innovative solutions. While drones are yet to make way into India, dark stores and local fulfilment centres are already successfully functional across the nation. They are playing a key role in catering to the hyperlocal demand for brands and are enabling the same-day next-day delivery to achieve the goals of cost reduction, more accessibility and optimisation of resources.