Tag: Neeraj Jain

 

By Indulekha Aravind

 

Manjunath V*, who juggles two jobs with college in Bengaluru, is one of Flipkart’s 16,000-strong delivery force, dropping off 70-80 packages a day. After his night shift with a courier firm ends at 3 am, he snatches a few hours of sleep before leaving for the ecommerce giant’s warehouse at 6.30 am. But, from this week, when the “Big Billion Days” sale kicks off, he says he will be reporting to work at 5 am and looking at an 11-hour shift so that he can complete that day’s sale season deliveries, likely to be 100 a day.

 

“There’s no fixed time to when we finish — the sooner we complete the deliveries, the earlier we can leave.

 

But we need to finish that day’s deliveries,” says the 19-year-old. Manjunath’s employer, Flipkart, is looking at shipping 1,03,000 packages daily during “Big Billion Days”, as opposed to 65,000 on other days, according to multiple operations executives with the firm. Its Gurgaon-headquartered rival, Snapdeal, saw sales grow 10 times during its preview Diwali sale held last Monday and is optimistic about similar numbers as the festival season picks up. Furniture marketplace Pepperfry is looking at sales doubling during these months while payment-solutions-firm-turned-marketplace Paytm is eyeing 3x growth. If these projections sound dazzling, it’s because the Diwali-Dassera season is traditionally the time when Indians have shopped the most online, and ecommerce companies expect 40% of annual sales to come from the months of October and November.

 

And while deep discounts are still the way to the customer’s wallet for companies like Flipkart, Amazon and Snapdeal, ecommerce companies across sectors are also trying to leave nothing to chance while ensuring the customer gets what he ordered, on time.

 

Gearing Up for Busier Days

Though the sales only begin in mid-October, companies began supply-chain preparations as far back as May. In fact, Snapdeal says they begin gearing up for next year’s Diwali from the previous year. “Unlike Flipkart, we have a sale every week, which is a good stress test to gauge customer experience. We began getting ready for this Diwali as soon as the last festival season was over,” says Jayant Sood, chief customer experience officer at Snapdeal. The company, valued at $4.5 billion in its latest round of funding, saw a 15x surge in traffic last Diwali, according to Sood. Being a marketplace, it does not own inventory or a logistics team but, last Wednesday, Snapdeal announced a $20 million investment in third-party logistics player GoJavas, in which it holds a 40% stake. GoJavas, says Sood, now delivers in 350 cities. The fresh fund infusion in the logistics company is in addition to the $100 million Snapdeal has invested in the last six months to improve its logistics and supply chain.

 

In Bengaluru, rival Flipkart has been streamlining its delivery process to meet the daily order avalanche during its biggest annual sale. With last year’s edition of its Big Billion Day coming in for a lot of flak from customers for price discrepancies, inadequate stock and server glitches, forcing the company’s founders Sachin and Binny Bansal to apologise to customers, the company has ramped up its back-end operations.

 

Flipkart now has 16,000 delivery staff, has increased the number of fulfilment centres from 13 to 16 this year and has automated its warehouses, says Neeraj Aggarwal, senior director, delivery operations. According to another operations executive, who requested not to be named, half the members at each delivery hub have been trained to make 300 deliveries a day. “Earlier, staff would spend a lot of time settling the cash-on-delivery accounts. This year, we have installed cash deposit machines in cities where will see the heaviest sales so that they just need to deposit it in the machines,” he says. Handheld devices to scan items and segregating categories by the day are also expected to cut delay, he says.

 

For Paytm, this will be the company’s first Diwali as a marketplace. The Alibaba-backed firm began talks with suppliers and logistics firms three months ago and has tied up with 30 courier partners. “We’ve ensured our third-party logistics partners have enough exclusive capacity and have shared our plans about expected sale volumes,” says Saurabh Vashishtha, vice-president, business, at the company’s headquarters in Noida. “We also have very strict service-level agreements whereby the logistics partners will incur losses if a package is not delivered on time. Also, the volume of business we give them would depend on the service,” he adds.

 

Paytm has introduced a logistics cloud for local courier companies which are big in that particular region but not plugged into the ecommerce economy because they lack the technological capability. Similarly, the company is also creating a warehouse cloud to integrate warehouses run by third parties into its system, which would then be available to the smaller merchants selling on Paytm. “We negotiate with the warehouses so that the small players get a better rate,” says Vashishtha, who attributes the glitches that happened with most etailers last festive season to not anticipating the demand. At present, over 60,000 merchants sell on Paytm.

 

Of Bulk Orders and Deliveries

Delivery is particularly crucial for furniture sellers like Urban Ladder and Pepperfry, with staff usually having to assemble the items they deliver. Urban Ladder does not outsource any of its logistics and operates with a team of 850 delivery staff, predominantly in Bengaluru, Mumbai and Delhi. “We control the last mile, so we also take care of the training of all the delivery staff,” says Kaustabh Chakraborty, vice-president, operations. Though the company states that it will take 15 days to process an order, Diwali is the time when there are multiple requests to deliver much faster.

 

“Each customer might also order 20-25 items for their homes, if it’s a “gruhapravesh” (housewarming) and there is huge pressure from the customer to deliver everything together,” says Govind Raj Kaushik, manager, operations, at the company’s warehouse in Bengaluru.

 

Furniture marketplace Pepperfry has also moved to take complete ownership of its logistics chain. “This year, we stopped using third-party logistics providers. The entire distribution chain is now centrally controlled so the tradeoff that might have been there between our product and a rival’s will not be there this year,” says Ambareesh Murty, cofounder and chief executive of the company.

 

Murty says Pepperfry, which ships 300,000 items a month, is looking at a 100% jump in the festival season, just as it did last year. “We deliver to 430 cities and will add another 200 in the next two months,” adds Murty. The company’s fleet of trucks and delivery personnel have seen a five-fold jump from the beginning of the year. It also has an app called Far Eye to track the deliveries in real time. “A delivery does not take more than half an hour. An alert is sent to the supervisor if it takes more time,” says Ashish Shah, Pepperfry’s chief operating officer.

 

Feet On the Ground

For hyperlocal grocery platform Grofers, the biggest challenge is ensuring there is adequate staff to deliver the 100% surge in orders it expects in electronics and gift items. The jump in demand is accompanied by higher attrition with delivery staff taking leave during the festival season, says cofounder Albinder Dhindsa.

 

“We normally add around 10% staff month-on-month but we’ve ramped up our delivery capacity by 40% to 4,200 over the last two months anticipating the dip in attendance,” he says. “We also need to make sure we have a good relationship with the suppliers so that we are the preferred vendor.”

 

Neeraj Jain, cofounder of electronics marketplace Zopper, is anticipating his first challenging Diwali because, till last year, the company was merely connecting buyers and sellers through calls, and not accepting orders. To help the smaller merchants on its platform deliver on time, Zopper will be underwriting part of the demand.

 

“We have told them to scale up operations and will be paying them, even if there is not sufficient demand, provided their services are available exclusively to us. We’re also offering incentives if they perform well,” says Jain.

 

One would expect higher pressure on delivery staff during the peak season, but many did not seem apprehensive. Ravish Kumar*, who picks up returned goods for Amazon in New Delhi and is on the payrolls of a third-party firm, says he will probably have to pick up 50 packages a day, instead of 40. “There was pressure when there were fewer centres but not anymore,” he says, though he adds wryly that the company does not give mithai dabbas for its delivery staff. Amazon also runs a programme whereby a delivery associate is given the opportunity to work as a process associate during the festival season, which could translate into a promotion. On average, in the bigger ecommerce companies, delivery staff are paid `12,000 a month. A customer associate with Vulcan, a logistics firm that works with Snapdeal, says the number of van deliveries might go up from 10-15 to 20 a day during Diwali and Dassera, with an additional `20 paid for each delivery after 20. In Mumbai, delivery agent Arjun Kumar is preparing to hit the jackpot during the festive season, when deliveries are likely to cross 100 a day from the usual 45-50, which would earn him incentives.

 

“My take home could easily double in these three months,” says the 23-year-old. A section of delivery staff in Mumbai like Kumar had gone on strike earlier this year pressing for the fulfillment of some 21 demands that ranged from toilet facilities to incentives for additional deliveries and returns but unions affiliated to Flipkart, Snapdeal and Amazon and the like have adopted a more conciliatory position since. “Around 15 of these demands have been met,” says Sachin Gole, a leader of the MNS Kamgar Sena. It was the delivery staff affiliated to MNS, the Raj Thackeray-led political party, that had gone on strike in July. “These companies have promised to give delivery personnel incentives once the hectic sale season concludes,” adds Gole.

 

But though personnel have been recruited, incentives promised and stress tests carried out, there is still one factor that could throw the best laid plans out of gear. “If it rains, it will spoil our delivery schedule,” admits the Flipkart operations executive quoted earlier.

 

*Names have been changed on request (With inputs from Rahul Sachitanand)

 

Source:The Economic Times

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