TCS has the infrastructure and the legacy. The startups have the technology. Who will win?
Who delivers your packages? Everytime you order something off Daraz, or make an impulse buy from the latest Instagram thrift store, or buy a pair of shoes online from a store because you don’t have it in you to visit an outlet, how does your purchase get to you?
Easy. A delivery service picks it up and has it delivered to you in however long it takes. The website will let you know how many business days it is going to take, and the delivery service will message you when they have picked up the package, when it is on its way to you, and when it will be delivered by. In Pakistan, the likeliest scenario is that you will be paying cash-on-delivery (COD) for your purchase.
The process you might think is quite simple. What you do not know is that behind the seemingly simple business of eCommerce logistics, big bucks are at stake, and a number of players are working the field to try and become the undisputed King of eCommerce logistics. At present, eCommerce in Pakistan is relatively small, although estimated to be a USD 5 billion market.The global average for eCommerce transactions as a percentage of total retail was in the 15 per cent range pre-covid. In comparison, Pakistan’s eCommerce sales are between 1 to 2 per cent.
The potential, however, is massive. Pakistan has a gargantuan population, and for the past few years there has been a concentrated effort to make people more comfortable with a digital Pakistan. While eCommerce might be small, there are already established marketplaces like Daraz, PriceOye and Telemart in Pakistan, and there is ample space for more marketplaces to come and for existing ones to grow. So if eCommerce becomes the behemoth so many are counting on it to become, managing the logistics of delivery will become a very large and very profitable undertaking.
Currently, there are a few different kinds of players in the eCommerce logistics market. The first are the major players which include TCS, which is by far the biggest in the logistics business, Leopards’ Courier, and Muller and Phipps (M&P). (Editor’s note: Even though TCS is twice as large as Leopard’s and M&P but for analysis we have put all three in the same category). Despite eCommerce being very small in Pakistan right now, these companies are investing heavily in eCommerce deliveries. These are the companies that are very firmly at the top of this very tiny (for now) hill. Behind them are companies like BlueEx and CallCouriers, who also started off as courier companies delivering documents, but have made a very obvious pivot towards only doing eCommerce deliveries. And then there are the startups. They seem to be everywhere in Pakistan these days and in every industry imaginable. All of them looking to make it, all of them hungry, all of them very much in the game. In the eCommerce logistics world, the prominent ones are Rider, Swyft Logistics and Trax.
The summit is a clear one. Every single one of the companies named above want to be the go to logistics service provider to online marketplaces. The reason TCS and the other legacy companies are on top right now is because of their sheer size and their vast network that has existed for so many years before online marketplaces were even a thing. Others like BlueEx and CallCouriers are in it simply because they got in on the game early. The real players to look out for here, or so they claim, are the startups. They might be at the bottom of the pile right now, but armed with technology they are making quick work of scaling the eCommerce logistics mountain. But will they be able to push ahead of TCS and the old guard of logistics? Or will they get kicked back down the steep slope? Profit looks at the future of eCommerce logistics in Pakistan, and what company is most likely to come out as the King of this industry.
How are incumbents set up?
Here’s the rub. Companies like TCS have been around for a very long time. TCS, for example, started operations in Pakistan in 1983 with 12 stations. In the nearly three decades since, they have developed a sprawling infrastructure all over Pakistan and a massive fleet that has proven itself to be reliable. However, this infrastructure was built mostly to deliver letters and documents for large clients such as banks, corporations, and the government.
The new kids on the block like Rider, Swyft, and Trax believe this is the core of the issue. They think that the big players have tried to fit eCommerce deliveries into the same model that they used for delivering letters and documents. They claim eCommerce logistics is a completely different ball game and that they have the tech to do it right. The big companies have the momentum, the infrastructure, the experience, and most importantly they are cheaper. The startups are more accurate, they offer a better customer experience (vital in the eCommerce game), but they are more expensive. Which methodology will succeed?
To be fair to companies like TCS and Leopards, they have been trying to delve into this segment for a while, and that is despite the fact that it is still a very small as we have mentioned earlier. It was in 2006 that TCS did its first (sort of) online delivery, which was COD delivery, way before the advent of online marketplaces and online stores, and when the internet was restricted to business primarily. The arrangement was with a foreign company that was the distributor of BlackBerry phones in Pakistan that they were selling via TV ads.
“So TV sort of had commercials followed by the customer calling a certain phone number so that’s how we got started in eCommerce and we have been the pioneers and remain the most preferred client for our B2B partners or the online shops owing to our operational excellence and our customer service,” says Qasim Awan, director and head of eCommerce at TCS.
While their eCommerce business is 15 years old, TCS has been in the courier business for the last four decades, delivering letters and documents to large clients that include banks, corporations and the government, and therefore has its operations set up according to that. All the riders and operations are customised to ensure that the courier business flourishes because, really, eCommerce is a very small portion of the company’s business right now and the major chunk of its revenue comes from the courier business.
“When the internet boom started, some of our courier business was taken away by it but it was replaced by eCommerce,” says Qasim. This is one place in which there is once again proof of Pakistan being a very slow evolving country. The internet should have wiped out the need for letters and parcels, but even today banks send out monthly statements to their customers in print – most of them get thrown away. This should have been a big dent to companies like TCS, but it wasn’t, so they ended up only puting some resources into eCommerce because of its relatively small size.
While the courier business gives TCS and the likes a natural edge, it also puts a burden on them of having a very profitable business in the form of courier business. “Courier business is an extremely profitable business which requires a network effect to do it well so the barrier to entry is very high,” says Abid Butt, former CEO of E2E Logistics Company. “Because of a high barrier of entry, these guys could charge high prices to customers and that resulted in high profitability,” he adds.
And because it is very profitable, eCommerce business becomes a challenge for these businesses. “Consider this: an envelope on average weighs something like 150-250gms. In a 1kg parcel, you can have five envelopes. For delivering one envelope from Lahore to Karachi, big logistics companies are going to charge Rs150-200. For a kilogramme, that’s Rs1,000 for five envelopes if the envelope weighs 200gms,” says Butt. “For eCommerce, to deliver a package from Lahore to Karachi will cost Rs200 only. So a courier company is getting Rs1,000 to utilise a rider to deliver a 1kg envelope against Rs200 for using the same rider to do an eCommerce delivery. So of course their natural inclination would be towards Rs1,000. Not only in terms of profits but also in terms of volume,” he adds.
Here’s where we would like to explain a bit how these usual courier deliveries are different from eCommerce deliveries. Each one of you reading this piece has some time in your life received a letter at your house that was slid under your house gate. Most of you would also have received bank letters at your home or at your office where they get delivered in bulk. And because they get delivered in bulk at a single location, the deliveries are swift, seamless, and profitable.
For delivering, let’s say a bank’s letter at your home, the rider does not have to call you to know the directions, he will not even ring your doorbell because there is no personal interaction, no signatures required. There is also no cash that the rider has to collect either for the delivery that he is making. From estimates given to Profit, courier [documents or letters] deliveries take between 20-30 seconds for riders to complete.
Now compare that to an eCommerce delivery. The rider appears at the residence to deliver the parcel, has to ring the bell, asks for the name of the recipient, discloses the order charges, gets the signatures and then waits for a few minutes to collect cash against the order. The entire duration for the rider can easily go to about 15-20 minutes for single delivery. “For the document deliveries that we do in a single day, we do just half of that in eCommerce parcels,” a rider from one of the older logistics companies told Profit.
It is wildly simple: documents bring higher revenue for companies like TCS and Leopards Courier, and are delivered easily. On the contrary, eCommerce deliveries are tough and timely and require more dedicated manpower. “eCommerce is not a high margin business. It is not a great margin sub component of the courier industry to be in, which is why you would see a phenomenon that traditional courier companies all over the world do not react as enthusiastically to eCommerce as newer entrants.There is an economics angle as well. But volumes keep us interested in this particular game,” says Qasim.
That is why eCommerce does not constitute a large component of TCS’ overall business. It is in fact quite small but a fast growing one, as Qasim tells us. Now, your usual courier delivery experience does not require cash collection and the eCommerce delivery experience, for the large incumbents, becomes more difficult because there is cash involved that the rider collects most of the times he makes a delivery and has to make a stop to deposit that cash. It is cash most of the time because cash is still the king and market estimates put the number of cash on delivery (COD) orders in eCommerce at 90-95% and only the remaining 5-10% are orders for which payments are made before the product is delivered.
This is where the problem comes in. Up until now we have been talking about how legacy companies have the advantage of experience and infrastructure. However, they have the wrong kind of experience. Their fleet is not used to or good with cash handling, and it takes much longer to deliver an eCommerce package than it does to deliver simple letters.
“Things are bound to be difficult. Legacy companies have a fleet of thousands that are trained to deliver documents, which they have been doing for decades now. They will naturally have trouble if you ask them to deliver eCommerce deliveries. Another friction is that these riders receive incentives based on the number of deliveries they make. Courier deliveries can be done quickly while eCommerce ones take time. That’s simply a lost incentive for these riders and that frustrates them,” says Abid Butt.
For every pickup that a rider makes at a B2B client like bank for documents or at a marketplace’s fulfilment centre in case of eCommerce orders, he takes it to the hub or the warehouse of the company where these parcels are sorted based on their dropoff location.
While Profit was not able to get a tour of these facilities and spectate the processes involved, from a version in the market, the scenes at the hub where sorting is done looks something like this: experienced workers would be manually putting envelopes in boxes labelled according to the city and the neighborhood where they have to be delivered. There would be boxes which would be labelled as Gulberg, Lahore or DHA, Lahore and like that for other cities and localities, running in hundreds. These parcels would be placed in these boxes by these workers who have been around for a while, who know the exact location of the box for let’s say Johar Town, Lahore, and wouldn’t mind throwing the parcel, confident that it went into the right box because hey, they have been doing this for a while. All the corresponding entries would be recorded manually on paper sheets that would be time consuming and inefficient and difficult to reconcile.
The workers at these stations are in a rush, and they are incentivized to sort at high speeds. So a lot of the time, they are throwing products into the relevant boxes and not even looking back to see they are going in the right bins. The problem with this arrangement is that if the package goes into the wrong box, there is little chance that the company would know who made the mistake and the error can not be pointed out. And the parcel is also lost. Now if it had been a bank letter, it wouldn’t have been much of a problem. However when it comes to eCommerce, it is a big problem. Imagine ordering a trendy pair of earphones on Daraz never to see it and only rate Daraz worse because you had a bad experience. And because the package went AWOL at the sorting station, it is a cost for the online marketplace if it is lost for good and a cost again if the parcel was retrieved but went back to the marketplace and a re-attempt at delivery is to be made. Furthermore, there are no constant engagements with customers about their delivery orders.
“If you look at the market landscape in Pakistan, only 80-85 percent of orders reach their end destination. The reason for this shocking statistic is that there is simply no visibility because things are done manually,” says Salman Allana, founder of logistics startup Rider.
It is not only that, however. Online marketplaces and logistics companies have identified fake attempts by riders for products that they report were delivered but weren’t actually. “With legacy courier companies, nobody would really know if the rider went to the address where he was supposed to make a delivery, or if the customer was really not available,” says Muhammad Uns, CEO of Swyft Logistics.
Then you have riders who would start calling customers about the address without trying themselves to figure it out. Sometimes customers won’t pick up the phone or someone won’t be at the house and that would result in a failed delivery, which would have to be delivered again. That would eventually lead to sometimes the arrangement becoming expensive for the logistics company, while sometimes it would be a bad experience for the customers.
TCS’ Qasim Awan, while talking to Profit, acknowledged that while sometimes deliveries can get late because of their riders, sometimes, it would be late because the riders would keep waiting at the fulfilment centre of an online marketplace and the parcel would not be handed over to the rider timely.
At this point, you might be thinking that the startups have it in the bag, and that the legacy companies are bound to face a meteoric crash. They have fewer successful deliveries, and their culture is not client friendly. And the startups claim they are going to fix all of it through technology and innovative, scalable processes.
The serious competitors here are three. Rider, which was founded in early 2019. Swyft Logistics, which started operations in late 2019, and Trax Logistics which was founded in mid 2017. All heavy on technology. Rider claims to have adopted a lean fleet model, maintaining 300 full-time riders and growing in line with their Shipper base. They leverage their crowd-sourced ‘Out Rider Program’ to fulfil demand spikes, scaling to 800+ riders during peak sales such as 11/11.They claim this lean model gives them competitiveness amongst the new players. Both Swyft and Trax claim to have a last-mile delivery fleet of 1,000 plus riders.
Their process all the way from picking an order from a marketplace to delivering the parcel to the end customer is very different. As Salman Allana, CEO of Rider, explained to us technology and process innovation has been incorporated into these cycles to make deliveries more efficient and successful. This is how it works.
After picking a customer’s parcel from a marketplace’s facility in, say, Lahore, Rider brings it back to its warehouse, just like it happens in the case of TCS. “At the time of pick-up, our team already has visibility on when this parcel is arriving and to which sorting center, so our inbound team is standing ready, pre-alerted, expecting the shipment,” says Salman. “All our staff have automated devices. Parcels are scanned inbound. The moment the scan happens, the customer gets an SMS or notification through the Rider Customer App with an estimated delivery time. The customer is provided with a customer service phone number should they have any questions or concerns For Rider, removing customers’ ‘package anxiety’ is key to our tech and process design. We want customers to take back control and visibility of their online orders,” he says.
“Behind the scenes, between pickup and delivery, a single parcel moves through multiple stages. The orders are scanned inbound by operations staff, armed with android-based in-house developed applications. This app guides them through an accurate primary sort – a split based on cities. Different city orders are transported through our own B2B trucking network. We used to outsource city to city truck movement, but quickly found major pain points associated with that. So we built our own B2B trucking solution which is becoming a major part of our business.”
With pick-up, sorting, and city to city transit processes completed, the package is then sent to the closest delivery station depending on the customer’s location. “These delivery stations are the last stop before the parcel reaches your doorstep. Our route optimization technology tells us which parcels should be in which delivery bags and for which delivery routes. This gives us an edge on delivery time efficiency. Once ready to deliver, the rider scans your parcel and you receive a notification that your order is out for delivery Your live tracking lin tells you the parcel will arrive in 10 stops or five stops. We calculate the ETA based on maps and traffic data, letting you know the exact time slot your parcel will be with you,” Salman says.
At delivery, if the customer is not reachable, the rider marks this delivery as ‘failed’ and ‘ready for a second delivery attempt’. The customer will receive a notification that their delivery was attempted but failed for a specific reason (customer not available, cash not available etc.). Through customer verification, Rider operations staff are able to check if the delivery agent made a legitimate delivery attempt or not, solving a key problem in the industry. Here, Rider seems to go one step further by analyzing delivery agent behavioural patterns and geo-tagging technology to catch problematic riders. TCS and others have nothing of the sort, which is why they have to rely on their rider’s word.
Essentially, Rider’s technology and process optimization decreases the lead time that makes the delivery faster. Iterations with regards to customer engagement means that the customer also has visibility of the order and constant engagement with the customer and notifications allowing them to change address based on the time slot between which rider is going to arrive means that the attempt is more likely to become successful than in the absence of such engagements.
Why does success rate matter? The majority of the eCommerce deliveries are cash on delivery and failed delivery means the cost of the delivery was incurred but cash against it was not collected. Reattempt means further cost and if the bulk of these deliveries are unsuccessful, chronic cash flow issues can choke growth especially of small online marketplaces.
Similar optimisations have been brought about by Swyft Logistics. It has also brought technology where sorting would happen not in hours but in minutes based on AI (artificial intelligence) and ML (machine learning). The parcels are sorted automatically rather than people doing it and technology helps the startup decide which parcel has to go to which side of the city.
“At Trax, we have built plugins for Shopify, Magento and built customs solutions, our delivery management system. Our bookings and integrations are done through APIs. All that is based on a cloud system. Even if 50,000 orders are booked, our system is not down and we are integrated with major players in the industry,” says Muhammad Hassan Khan, CEO at Trax Logistics.
“Once the order is delivered, our rider collects the cash, and because everything is live, as soon as the order is delivered, we close our receivable with the rider and open the payable with our shipper and we are able to IBFT that money to our shippers which removes a huge pain point for them,” adds Salman.
Timely cash settlements are important for online marketplaces. Let’s just say it’s make or break for these companies, especially smaller ones. If a logistics company takes 15-20 days to settle the cash they collect on COD orders with a marketplace, it can be really bad for small online retailers. And 15-20 days is what startups say was the time that the big companies took to reimburse cash to marketplaces for these orders. And because these startups have digital payments arrangements, they are friends of these eCommerce startups that they have partnered with and also their saviours.
“We have partnered with JazzCash and EasyPaisa and our riders also carry card machines in case customers do not have cash and the rider comes back, which can incur additional costs,” says Muhammad Uns, CEO of Swyft Logistics.
All of these startups have been able to get some eCommerce delivery volumes. In the case of Rider, Salman claims that his startup has been able to do as many as 1 million deliveries since its inception, with a first attempt success rate of 87%, and an overall success rate of 92-95%. On the other hand, Swyft claims a success rate of as high as 96%, while for Trax, an online marketplace shared that Trax’s success rate on their platform was in the high 80s.
But incumbents are here to stay
Let us make one thing clear, however. Despite all of this, companies like TCS are not going to be easy to dislodge, especially since they seem to be making a real and concentrated effort of moving towards tech forward solutions themselves. From the market intelligence collected by Profit, legacy players in the last mile eCommerce delivery space also have success rates above 80 per cent and they are improving. Certain commentators also questioned if Rider or others would be able to maintain their success rates when they scale. To recall, Rider has a full time fleet size of 300 riders, (scaling to 800+ in peak time), and both Swyft and Trax have a last mile delivery fleet of 1,000 plus riders, whereas heavyweight TCS has over 6,000 riders. Would they be able to maintain the same success rates when they reach the scale of TCS? Also, what will happen when the venture capital money runs out?
Marketplace owners who have worked with startups as well as legacy logistics companies, and who chose not to be named, also tell Profit that legacy logistics companies offer same day deliveries within the city and more or less deliver in the same timeframe as startups which essentially means that the unique propositions on the back of technology are being matched by legacy logistics companies because, and it will come later, they have also started focusing on automation. They further say that legacy companies can be less expensive because they tend to undercut prices to stay ahead of competition and have started doing instant cash settlements (24-48 hours) like startups.
Let’s pause here a bit.
Pricing makes the startups uncompetitive right now. For instance, for within city deliveries, legacy companies would charge Rs80 for a single parcel which can go as low as Rs60 because these companies are resorting to price wars. In contrast, Rider could cost as much as Rs120 for the same intracity delivery. On the same note, Swyft also said that they were not inexpensive, without disclosing any numbers.
Why do these startups charge more? Because the better success rate they claim, in the 90s that Rider and Swyft claim, saves losses that come with a lower success rate that legacy companies have when reattempts are made. Because these losses are being averted, these startups think a premium should be paid to them. But as per testament from a marketplace owner, they would rather opt for a lower price with TCS because it has another differentiation factor that makes it most compelling: TCS has the widest coverage for these deliveries in Pakistan, delivering parcels to destinations more than others.
“The differentiation factor here is coverage. When you are signing up a company for delivery, you would prefer to partner with a single company rather than multiple companies and then you would prefer one that offers the best coverage. We can’t ignore this,” says an online marketplace CEO.
In response to the point on coverage, Rider CEO, Salman concedes that traditional players have a large established network, consisting of brick and mortar branches. However, according to him the startups, including Rider, having learnt from the successful global e-com logistics players, are developing innovative, low-cost, efficient, and flexible ways to aggressively expand their networks. “Solutions such as micro-distribution centers and mobile warehouses will enable us to expand quickly in the near future”, says Salman.
The way the requirements of the eCommerce marketplaces are structured, players like TCS, because they are so big, are simply not expendable. “There would be areas of expertise that we won’t have at Daraz Express but TCS would have that expertise and we work with to improve our customer experience,” says Ehsan Saya, managing director at Daraz.
A problem here is also that besides Daraz, many of the online retailers are big fashion brands that form the bulk of the eCommerce volumes, which have an established presence in physical retail and, therefore, have less cash flow issues. Khaadi, Sapphire and the likes, because they have less cash flow issues, happily partner with the big in business because they are also big in business and don’t really mind long cash settlement cycles. Companies like TCS also know that they are big and leverage their position to negotiate deals that ensure that they remain big. For instance, TCS would make its network and vast coverage available to companies if they give the entirety of their volumes to the company.
They would also offer better prices to secure big clients, effectively staying ahead of all others and that reflects in TCS’ top position in this pyramid. While there are no solid numbers of how much market share is owned by companies in eCommerce logistics, most versions in the market put TCS at the top spot, followed by Leopards Courier as a close second. CallCouriers and Muller and Phipps (M&P) contend for the third and fourth spots and then rank the startups Swyft and Rider. Boldly, however, Trax claims the third spot for itself based on its in-house market research and boldly, it also says that its delivery network now matches that of TCS and Leopards. Whatever the case, with all of the startups fighting for fourth place, TCS and Leopards are firmly in first and second place.
Now, eCommerce volumes are erratic throughout the year, with over 50 per cent of the volume coming on a handful of big days like Eid days or 11/11. Last mile logistics companies are, therefore, faced with the tough choice of staffing for the entire year, low days or days when there is a boom. It is also here that because of the year round staffing for their courier business, TCS’ apparent weakness becomes its strength. It simply becomes the go-to option for marketplaces because it is the only one that can handle the large volumes on these days.
“It’s the days when eCommerce is on the boom that our expertise comes into play. Not only do we have large fleets, we have operational flexibility with which we can carry out these deliveries. The size of the company means that we are able to take this volume in and cater to it and make these deliveries,” says Qasim. “For us, customer satisfaction is of prime importance. If our customer is running let’s say a lawn campaign, we can dedicate entire sets of fleets to ensure timely deliveries for our customers,” he adds.
Startups have been able to scale on the back of technology. The question is would legacy companies sit idly by and let these companies scale further? Legacy companies are already ahead in terms of size, scale and market share. They are matching the USPs of the startups already and in our conversation with TCS, Qasim said that his company was taking automation seriously and working on strengthening the human resources component of the business to consolidate further. They are also improving their tech capabilities, but it is always easier to build a tech infrastructure from the ground up rather than from the top down.
“Automation has benefits. It increases your speed, it decreases your costs and it decreases human error in this business which can be really costly because of a lot of permutations and combinations in the deliveries, especially in eCommerce. Automation is important for us and we invested in hardware and software in this regard. It is also important for us that our workforce remains highly motivated. Automation is important but I would not say it is a panacea for how to improve this business even though it is very critical,” he says.
Now Rider and others have started with technology, learning while the scale was small and bringing optimisations on that. While TCS is big and can’t really incorporate technology into the giant corporate machine in one go, or at least that is what the startups believe. Any automation would mean training professionals and fleets which could affect customer experience and eventually hurt the company’s market presence. But Qasim does not seem worried.
“Innovation is not difficult for TCS. We have been evolving and innovating based on customer demand and this is another phase in our evolution in terms of bringing certain investment, certain Capex and vehicles. We have just gone through the largest fleet revamp in our history right in the middle of Covid-19. This was a big investment. We have also had automation spells driven by a dedicated team that did time motion studies, figuring out all what has been happening with regards to all our hubs and warehouses and how all the processes can be turned. So yes our scale is larger, but I don’t think it will be difficult for us,” he says.
“We have carved out TCS eCommerce Solutions which can be considered sort of a startup and we are trying to make it as agile as possible. Being a startup is great but it is also not the be all and end all because startups also lack a certain network. The key for us is not to have an agile business unit. The key for us is to have an agile logistics network overall. Yes, we could have a specific unit set up in Karachi, but if the agility could not be there in Khyber Agency what good would it do? It is not a bad idea but we are a very operation-focused group. That remains our main priority and if that is achieved, everything becomes smooth,” he says.
While TCS shared its plans, we have only heard of a version that mentioned Leopards Courier’s plans to also scale aggressively in the eCommerce last mile delivery space. The company has reportedly set up a new facility in Karachi to cater to increasing volumes but the automation plans of the company are unknown.
The threat to all
Here’s the scary part. All of this, all of the efforts being made by TCS and the high flying attempts could be for naught. Why? Because the eCommerce marketplaces could try and dominate the logistics themselves. eCommerce is currently only around 1-2 percent of the total retail in Pakistan and we can only make assumptions about who is going to dominate the industry as the industry grows in volumes. So while it is difficult to give a verdict here, we can make sense of the direction this industry is going to go and the example we have is of Amazon, the global eCommerce giant that started its deliveries partnering with logistics companies United Parcel Service (UPS) and United States Postal Postal Service (USPS), started its own logistics fleet and grew it to a scale large enough to threaten even the existence of its once delivery partners.
In Pakistan, the logical equivalent of Amazon is Daraz that started its own logistics fleet Daraz Express (DEX) through which it does around 50 per cent of the deliveries. For the rest it has partnered with TCS, LCS and even Rider.
The market sentiment in eCommerce is that marketplaces should not outsource customer experience to third party logistics companies, something companies like Amazon have been religious in following. That is the way it went for Amazon, and it will be logical if it goes the same way for Daraz. On the other hand, Daraz contended that is not the way they would go.
“No, we will not remove partners because the main reason is that when we have campaigns, we also scale our business quickly, and we will never be so efficient that we can do it all ourselves. Our relationship with partners is phenomenal. Nor do they look at DEX as competitors and nor do we look at them as competitors. We get into the room and we say that we did this, this is the data that we improved, you should do the same. So we will not get to the place where 100% of the orders will be covered by DEX, and we don’t aim for that. What we have internally aimed for is 60-65% of our orders will be done through Daraz Express and we will continue to partner with other players,” says Ehsan Saya.
Yes, we are questioning the existence of the last mile eCommerce industry but that is for some time to come, according to industry stakeholders. “There is enough in the pie for everyone. The opportunity has been further exploded by the pandemic. There is enough room for everyone. Though it is worth noting that it is not an easy business to get into. A lot of players rush into it but it only gives illusions of returns,” says Qasim.
“In fact, a testament to that is we don’t just have partners that are big, in smaller cities we have launched a platform called logistics marketplace where we partner with small players where we get them up and running. You look at this one city where the success rate is not as good and neither for our partners so why don’t you start doing deliveries in the city because you know it well and if your costs are good, we will give it to you because you can do it more efficiently. We are trying to make sure logistics overall gets stronger. So no, we are not planning to replace others. On days where our volumes go up, we can not just do it on our own. We need our partners. That is not on the cards for us at all,” Saya says.
The leader will take a lead and obviously TCS will run the show in eCommerce.
Aray bhae Pakistan post ko tou discuss kerlain. Pher TCS ki dukaan kholnli dou saal pehlay aphi ki site nay kitna neecha kya tha tcs ko.
Problem with old courier
1) Seth mindset their kids are ruling, slave leadership model
2) TCS move outs now eating other courier companies like m&p, leopard. Jou tcs main na kaesakay woh kya keraingay agay
3) tcs leadership gap, coordinators or 60+ age plus leading. How to educate them tech?
4) tcs lacks sales force now. Most of quality salesmen left already.
5) new companies lack exposure to ground happenings and mostly relying on cloud solution. Ask them their USP?
6) all companies are missing trucking phenomenon happening in pakistan with cpec. Clearly shows lack of vision.
7) who will rule in future? One who can grab remote or allied locations, Identify niche, rule technology, bring solution in last mile delivery, break the code in international.
An article written on an industry without getting to know the basics of it.
If the current e-commerce industry/Logistics companies repeat 20-25 years old idea/concept to run then everyone will be the looser. Infact, there is no room/future for the Logistic business.
It’s not the war between A & B companies outside (This is the War inside our own mindset) which takes extra time to realise the facts! That put us into the reactive thinking pattern.
Basically it’s a war between old mindset and new mindset, conventional approach & unconventional approach, technology Vs mannul system towards solution orientation in the Industry.
Must say, this is the time of transformation as we experienced in the near past and lost big giant like Nokia, blackberry even we could easily overview number of industries in Pre & Post COVID situations and their financials graph tells you the reality where the businesses shifted worldwide.
And the reality is that every business will be Online and those who have guts to identify nitche, pain point of the costomers and come up with innovative solutions which bring ease and make life simple for the people will definitely lead the industry.
No coherence in the article. The article is when you know you are about to miss a deadline and have to get words in paper.
TCS has the infrastructure and the legacy. The startups have the technology. Who will win?