This festive season will be all about the need for speed, as major e-commerce companies have now moved into the express (same day or next day) delivery paradigm, shifting from their previous timeline of 4-5 days.
Making the delivery game maddeningly difficult will allow fast-moving business players looking for instant gratification to take over the majority of customers. All in all, e-commerce platforms are leading the way in staying ahead of the delivery curve and ensuring that no shopper is left wanting in the midst of the holiday rush.
However, this shift in e-commerce behavior has been in the making for some time, driven by the maturation of India’s express delivery ecosystem. which currently drives 40% of online grocery sales.
Over the past year, e-commerce markets have made significant strides in increasing delivery speed, introducing same-day and next-day services to meet customer demands. A vivid example is Flipkart, which announced at the beginning of the year that it would offer same-day delivery on several product categories at no extra cost.
With the market at risk, Amazon followed suit, while beauty platform Nykaa and fashion site Myntra began experimenting with same-day delivery options. Seeing this, many D2C brands are also adapting to stay competitive.
Although they may not match online marketplaces in terms of order volume, they are eager to offer faster delivery options to stay competitive. A case in point is GenZ-centric fashion startup NEWME, which recently launched 90-minute delivery of its products in select areas of New Delhi (NCR).
Logistics experts speaking to Inc42 said demand for express delivery has increased dramatically compared to last year’s festive sales. Same-day and next-day delivery have increased 4-5x during peak holiday sales periods, now accounting for 12-15% of all e-commerce deliveries, a huge jump from almost zero 18 months ago.
The increase comes at a time when e-commerce companies such as Amazon, Flipkart and Meishu are expected to register 20% year-on-year growth in gross merchandise value, generating sales in the range of INR 1 Lakh Cr to INR 1.2 Lakh Cr this festive season. . To Redseer Strategy Consultants. Fast trade is expected to contribute about 8% to this overall growth.
Rush Celebration paves the way for a 5x increase in same-day delivery
Speaking to Inc42, Vishwachetan Nadamani, Chief Executive Officer of Ecom Express, said that during the festive season, delivery speeds naturally improve due to increased demand and line trucks operate more. However, the increase in express delivery requests is more pronounced this year.
Therefore, the company has launched same-day delivery and next-day delivery in top 10 metro cities of India, with complete infrastructure to support these services, the executive added.
Meanwhile, Shadowfax co-founder and business director Praharsh Chandra said the company is well-prepared to handle the same-day or next-day delivery rush.
We started focusing on fast delivery with brands and markets about a year and a half ago. At the time, the industry had 0% same-day delivery, but now 10-14% of all intra-city orders are delivered on the same day.
As the peak selling season approaches, the trend is picking up, Chandra noted. In fact, our same-day delivery channel grew fivefold in just one day, on the second day of sales. “We experienced very high peaks.”
Chandra sees a clear shift in consumer behavior here, with more and more customers now demanding instant gratification. “Even for close-quarters, like orders from Bangalore to Mysore, which used to take two days, people now expect next-day delivery,” he said.
These sentiments are echoed throughout the industry. For example, Zipee founder and CEO Madhav Kastoria sees 6-8x growth as all its partner brands continue to scale during the festive season.
Quick delivery tab takes all categories
Demand for fast delivery has increased across categories this festive season. Electronics, beauty and personal care, fashion, and home goods are popular, with mobile phones being the most popular choice. Interestingly, Shadowfax delivered 15,000 iPhones on the first day of sales.
However, the demand landscape is not dominated by electronics alone. Categories such as beauty and personal care, fashion, and home goods are also in high demand, and brands such as Decathlon are showing increased sales of sports goods, showing that consumers are diversifying their purchases.
There is demand in different categories. However, it is important to focus on the focus of this demand and whether brands have optimized their supply chain with warehouses in these top metros.
So far, the demand for express delivery is highest in metro cities like Bangalore, Mumbai and Delhi. However, this trend is not limited to urban areas. Brands now stock in Tier II and III cities like Patna, Jaipur and Guwahati to offer faster delivery options in these areas as well.
Navigating the complexities of fast delivery
While express delivery services are in high demand, they also come with operational challenges. One of the biggest hurdles is optimizing inventory placement. Expedited delivery not only requires faster shipping, but also strategic positioning of inventory closer to customers.
Zippee’s Kasturia said this would require maintaining fewer PINs in each dark store, which would complicate logistics, adding that the logistics setup would enable faster access and more efficient delivery routes by creating local inventory centers.
Additionally, increased demand for same-day delivery increases the need for delivery riders, resulting in increased costs month-over-month. During peak seasons, volumes can increase 4-5 times, requiring additional capacity through hyperlocal delivery fleets.
Historically, logistics has had a rigid model where shipments from multiple customers are received, sent to a central sorting facility, and then sent to last-mile hubs. The whole process took about 16 hours. But for same day delivery, we cannot afford such delay. Therefore, we have restructured the supply chain to bypass certain nodes where possible. “It’s a technological and operational change,” said Shadowfax’s Chandra.
While same-day and next-day delivery typically carry a premium—about 25% more than express delivery—logistics startups are actively working to optimize operating costs. By increasing order volume and refining their processes, many have reduced the cost difference to 5-10% compared to conventional delivery.
Now, as the industry is on the precipice of ultra-fast deliveries, building an efficient supply chain will be the most critical element for the long-term sustainability of the Indian express delivery realm.
[Edited By Shishir Parasher]
#Fast #Trade #ECommerce #Battle #Fastest #Delivery #StartupNews.fyi #Startup #Technology #News