With its economic growth, expanding consumer base and changing lifestyle, and progressive government, Bangladesh can expect an explosion in e-commerce, says Indian smart logistics maestro TA Krishnan.
During his recent visit to Dhaka, the co-founder and CEO of India’s leading B2C delivery services company, Ecom Express, told The Business Standard (TBS): “The e-commerce market in the country is changing and it has a huge progress.
Ecom invested Tk100 crore a year ago in local door-to-door parcel delivery pioneer, Paperfly, and the technology-based courier company now covers rural Bangladesh to serve 98% of the population.
When Krisnan, with his 25 years of logistics experience, co-founded Ecom in the then nascent India e-commerce market in 2012, online orders made up less than 1% of formal retail there, which amounts to 4.5%. at 5% now.
In Bangladesh, e-commerce still accounts for less than 2% of formal retail trade and the market is likely to grow at a staggering 30-40% annual rate once it hits the necessary pace, he said. .
Bangladesh would need more serious e-commerce players like Daraz to improve the industry’s ecosystem as well as an improved funding environment that would include more venture capital and private equity investors, he said. -he adds.
In China and the United States, 28-30% of former retail businesses are now online. As many developed and mature markets are still experiencing decent double-digit or even high growth, less penetrated developing markets like Bangladesh have a greater opportunity for growth.
Replicate success in a similar market
In less than a decade of operation, Ecom Express has grown into India’s largest third-party B2C logistics company through its technology-based operations.
Ecom covers 95% of the country’s 1.4 billion population with 100% coverage in 22 states. Over 2,950 delivery centers are spread across the vast geography of India’s 29 states.
Picking up a package in the most remote location in one corner of India and delivering it to the most remote area in the other corner of the country takes a maximum of 5-6 days for Ecom as it connects the practical points in the same way the next day. .
“We have found Bangladesh as our very next destination to replicate the success of smart logistics,” said TA Krishnan.
In India, it takes a 3-hour flight to reach the farthest corners, while in Bangladesh a mere 15-hour road trip is sufficient.
Both are good markets due to their population density which can offer comparatively higher volume for profitable logistics, he said.
Bangladesh’s nascent market was still stuck with the traditional point-to-point delivery model – manual booking at courier offices and picking at their other office on the other end – instead of the necessary model of pickup and door-to-door delivery to the courier. across the country.
This is the value proposition that Paperfly brought to the Bangladeshi market and people loved it.
Following Ecom’s 100 crore investment, the 5-year local smart logistics company co-founded by four local talents now manages its nationwide network for guaranteed deliveries within 48 hours to anyone in the country from the same point, even the farthest in Bangladesh.
Paperfly trucks travel through 64 districts to transport goods and parcels, while it already has 186 delivery centers across Bangladesh.
Its activity has multiplied by 2.5 since the start of the pandemic which has accelerated the growth of online orders.
The best part of Paperfly’s story is that it has embraced operations that are completely technology-dependent.
Paperfly also collects cash on delivery on behalf of e-commerce businesses and settles the transaction within an hour.
A complete solution to many problems that e-commerce businesses and their customers face.
Technology at the heart
In the past, a strong network of truck beds was enough to be a large logistics company. Now technology is making a difference in the industry.
B2C e-commerce is entirely an arena of intelligent logistics, while B2B logistics is also adopting technology, TA Krishnan said.
Technology is the catalyst for convenience, efficiency and improved customer experience.
“Your smartphone is enough to order, pay, track delivery and interact with service providers that have dramatically improved the customer experience. ”
Server-based operations and applications that also use data science help smart logistics companies like Ecom and Paperfly better forecast demand, map origin to destination, better position and equip service centers and delivery, intelligent timing and also better behavior analysis.
After capital expenditure and operational expenditure for technology, all of this helps to reduce the cost of logistics.
Smart logistics and e-commerce for everyone’s growth
E-commerce and smart logistics are essential for each other’s growth.
The boom in e-commerce is largely driven by smart logistics across the world and in India, Bangladesh is no exception, Krishnan said.
In both markets, online orders from customers in non-metropolitan cities are growing faster. Smart logistics play a big role here, as the emerging non-urban market becomes an opportunity for logistics companies to acquire the scales necessary for profitability.
Some ecommerce platforms depend on their internal delivery network, some don’t. But third-party delivery companies are crucial for all of them, as additional orders at a time make them take third-party support.
8% to 10% of the turnover of the electronic commerce sector would remain the turnover of the intelligent logistics sector, anticipates the boss of Ecom.
His business will remain focused on the Bangladeshi market which is set to grow much more.
He said it might take a while for the whole ecosystem to support, to get people to embrace the smart ways, but the expected change is a must – today or tomorrow.