“The D2C market will continue growing, atleast at a CAGR of 45 percent, and we should be looking at a market of 600 million shipments by FY 2026,” said Ajith Pai, Chief Operating Officer, Delhivery.
Ajith was delivering a keynote speech ‘Cracking the D2C Code’ at YourStory’s Brands Of New India Mega Summit. He spoke extensively about the sector, offered advice to brands, and revealed how Delhivery is truly making a difference in the space. Here are some key takeaways.
We are looking at a mature market
Ajith pointed to a matured D2C market, thanks to a rapidly evolving ecosystem where the proliferation of smartphones and localisation of the internet among other factors has brought more customers online. “The categories that are going direct-to-consumer have expanded. Starting from fashion and lifestyle, we are seeing complex categories like larger appliances kick in and bring in growth,” he said.
Challenges in the sector are solvable
“D2C brands do face challenges which impact customer experience and hence, growth and profitability,” Ajith said, adding that cost of last mile and returns, speed, working capital, dealing with customer experience, all the way from time you receive order to delivery – each of these challenges rely on the supply chain. Another complexity that gets added comes with international shipping and going global. “The good news is that most of these challenges are solvable with right thinking around product, partners, and technology,” he said.
Coming to the product side, challenges could arise from the entire stack of services, whether it is direct consumer delivery, express parcel, freight, or managing the entire gamut of activities around the supply chain. “This also means you need to find the right partner - one who can give you reach, cost, visibility and customer experience,” said Ajith.
Today’s logistics players are backed by technology
The logistics industry has grown rapidly over the years and today, players are fairly well set up to solve problems such as cost and speed, with the right amount of intervention. Current players are backed by technology, so for D2C brands, this is a great advantage as they could solve most of the challenges they face.
“At Delhivery, we relied on technology and automation as the key elements of how we are driving our network to be more reliable. When a customer visits your website, it not only matters how fast you can get him the product, but also what you are promising him. With the right technology, Delhivery will be able to give you all the tools which you can embed in your solution and be able to promise a highly reliable date of delivery,” he added.
Brands need to find the right partner
The e-commerce market has made huge strides ahead. A decade ago, delivery took 7-8 days with a further 10 days for cashback. “Today, for every product delivery, we can remit the cashback within two days at no extra cost,” said Ajith.
Delhivery provides an additional edge, he added, in terms of their solutions in cross-border shipping and helping brands manage sales that happen through marketplaces. “Marketplaces would require you to stock inventory in their warehouses for the right fulfillment experience. To be able to deliver to those warehouses, Delhivery offers a time-definite and appointment based delivery product which is meant for freight,” he said, adding, “At the same time, as your international business expands, we have the ability to do both freight as well as express parcels, whether it is to international marketplaces or direct consumers in different countries.”
Advising D2C brands and entrepreneurs, Ajith said that while thinking about the right solutions is important, growth is also a critical element. “Make sure you have the right partners by your side - those who are scaled up and have the ability to invest in helping you scale up,” he adds.
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