India is a late entrant to the e-commerce industry and therefore is struggling to solve numerous issues related to the industry. One such issue is last mile delivery, which is the final step of the supply chain before customers receive their goods. The entire process of converting an inventory into a package and ensuring the package reaches the customer within the promised time plays a crucial role for the e-commerce companies. Delivering multitude of packages every day accompanied by huge traffic snarls and creaking infrastructure makes last minute delivery a challenge for the sector. On top of it, crowded streets, unfavourable weather conditions and non-standardized addresses further add to these woes. Several studies have revealed that the most imposing challenge faced by e-commerce industry is to find a viable option to deliver the products in the predictable & consistent time frame.
Challenges of Last Mile Delivery
According to a study by Goldman Sachs, the e-commerce market is estimated to reach $300 billion in terms of sales by the year 2030 as compared to the current sales of $20 billion. The sector, is however, facing problems due to high costs & inconsistencies associated with the last mile delivery process. If the e-commerce companies fail to deliver the product at the first go, it results in second or third delivery attempts leading to loss of time, money & customer experience.
Experts are of the opinion that for every 100 deliveries, a delivery boy needs to make around 140-150 visits. The ratio increases to 230-270 in case of reverse logistics, the process of handling returned or rejected goods. In addition, the salaries of the deliverymen has drastically increased in the last couple of years from Rs.10,000 to Rs.20,000, though the average ticket size of the product remains the same. These challenges of last mile delivery further increases when in small towns and rural areas. These areas account for around 50 percent of the total traffic generated by the e-commerce companies in India.
The Way Forward
India is struggling to solve the package delivery-related problems. The expectations of buyers are increasing and therefore it is necessary for e-commerce industry to come up with a robust delivery system. To solve this problem, Smartbox, India’s first network of automated parcel delivery terminals was introduced. Considered the most effective parcel delivery option, Smartbox outlets are present in various convenient locations to make it easy to pick-up and drop the delivery packages. The process makes it easier for the customers to pick up the delivery at their convenient time from one of the outlets.