Solving on-demand logistics challenges in India

I have been in sync with most of the on-demand apps that are launched around the world for the past 2 years. Most of the startups are replicating the models proved by unicorn startups. For example “We are the uber for groceries”. Why are so many startups flowing into the on-demand delivery space and creating high buzz in short time and disappearing in no time? All happening like a flash of light. I have analysed several factors of this trend and tried to conceptualize my learnings with my experience of running a food delivery company – Kloudkitchen. 

Here I list few points where the startups can work to build a sustainable on-demand supply chain in India.

1> Have a strong control on your inventory: You might be having a website and mobile app to sell your products / services with back-end inventory system. Make sure that you have a real-time update on your inventory across all the locations you deliver. 

2> Location matters: Take any Metro, be it Delhi, Mumbai or Bangalore: Not all the areas in a city are ready to take up your delivery services. Do a strong demographic study of the locations before you launch your services in a particular pin code.

3>  Be profitable from Day 1: These days customers do not mind paying the price for the value they get. Hence don’t be of the notion that your discounts and cashback offers create loyalty. But to build a sustainable business model make sure you have a decent net profit margin on every order you process.

4> Build a lean team: When you are a startup and in the process of hiring, build your team in an organic way. Take your time to build a strong core team and always keep in mind paying salaries hurts when you have unjustifiable team members in your company. Always have a metric “Revenue per employee” as your weapon to justify the salaries.

5> Don’t overcommit to customers: When you pressurize yourself to deliver in 30 minutes: your small startup team gets confused and starts taking pricely decisions. This leads to improper resource utilization. Hence try to club orders and do routing and have schedules for deliveries to optimise the costs.

6> Logistics is the core: Lot of startups I have seen underestimate logistics. But even if you see the e-commerce model, companies invest billions of dollars to build their supply chains. Hence logistics is a resource heavy and becoming a costly affair now. So keep your investment estimation numbers at a higher end while building your supply chain.

7> Build a feedback mechanism: Amazon and Zomato are the best example. It feels great to see the comments / feedback from real people and which helps customers to take justifiable buying decisions for your services. Create that sense of community.

8>  Localisation: Study every pin code you deliver to the core. Your customers’ behavior change for every pin code. Focus on those macro-economic data points to showcase inventory in those pin codes.

9> Train your delivery fleet: There are so many things to mention when it comes to training your delivery fleet. They are the face of your brand. They see your customers, talk to them and collect payments from them. Hence build it like an army.

10>  Have an easy payment collection system: Give your customers multiple options for doing payments. For eg. accept payments via paytm or other digital payments systems.

11>  Build relations: Never before in the history of mankind, we have been given such a robust tools to communicate / socialise / network and build relations. Use the same platforms to build relationships with your customers.

The list can go on but we all have limited time. Hence I am concluding my writing here and hope to see a great success for all your journeys.

Thanks and all the best

Gurudatt B Nadiger

Co-founder & CEO

Twitter handle: g_datt