Ecommerce industry in India has been in high growth phase of 80%1 (CAGR 2009-15) with the market growing almost 4X between 2014 and 2015. However, with inflow of capital into the industry significantly reducing (from $2,156 mn in FY2014-15 to $391 mn in FY2015-162), ecommerce companies have started focusing on reducing cost and becoming profitable. Most important metric of success has changed from GMV (value of all goods sold on the platform) to profitability.
Logistics cost (pickup, sorting, line haul and last mile) is the highest cost head at a shipment level, with line haul cost forming 50-60% of this total logistics cost in Indian ecommerce industry. One of the primary drivers of the line haul cost is the mode of transportation used i.e. air vs surface. In India, air was the preferred mode of transport for all line haul movements of more than 500 kms. This was primarily on account of poor service quality on surface: very long transit times and lower reliability.
Rivigo provides a comprehensive solution which allows ecommerce companies to reduce their line haul cost per shipment without compromising on the service level (short transit time and 90%+ reliability)
Our offerings include:
- Rivigo Prime (FTL) allows ecommerce companies to create their own time-sensitive and reliable line haul network across the country. Rivigo can provide both two-way and one-way vehicles.
- Rivigo Zoom (PTL) provides the same advantage of Prime (short transit time and high reliability) but does not require a company to create a fixed cost network. Zoom is a well-suited product when volume is below a critical level or highly variable in nature
- Air equivalent transit time on surface: There are 3 categories of service level when compared to air:
- Air equivalent service level on all destinations which are less than 1500 kms e.g., 1-day delivery on Delhi - Mumbai, Delhi - Indore, Delhi - Ahmedabad, Mumbai - Bangalore, Delhi – Patna lanes
- Air equivalent service on lanes not well-connected by air: e.g., Hyderabad - Ahmedabad, Surat - Bangalore, Delhi - Guwahati. In all these lanes due to fewer number of connections / non-reliable air services, Rivigo's transit time is similar to air (when considering end-to-end time including cool-off period for air service)
- For lanes greater than 1500 km and well connected by air, Rivigo provides a transit time which is just 1 day greater than air e.g., Delhi - Bangalore, Delhi - Chennai
- Full tracking visibility: With our in-house technology, clients can track their vehicles (in Prime) or each bag (in Zoom) on our web platform or mobile application. We also provide API integration facility, allowing direct integration of technology into clients’ tracking system
- Regulatory documentation management: Given B2C nature of ecommerce industry, state regulatory requirements are ambiguous / under development in most states in India. Rivigo provides full support in handling state regulatory requirements across the country including state permit creation (e.g., Form 50 for MP) or paying state entry tax (e.g., 2% in West Bengal)
- High reliability: With self-owned fleet of 1000+ trucks and pan India service network, Rivigo provides 90%+ on time performance
With our innovative solutions, our clients have been able to reduce their line haul cost by 50-70%.
1Source: PwC report: Ecommerce in India: Accelerating Growth, 2015
2Excludes logistics, food-tech, cab-aggregators. Source: Business Today, Tracxn