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During “sale days” — the golden goose of ecommerce retailers — business booms for logistic and courier companies that supply the products to the consumers. Sale over, the demand dries out.
Senior officials of several logistic companies that serve online retailers such as Flipkart, Amazon, Snapdeal and Myntra, told Business Standard the two weeks after a “sale day”, demand to deliver thousands of packages within a given time frame — that the sellers have promised their customers — shoots through the roof.
On other days, demands for their services is way lower.
Sale days are particular dates when eretailers offer huge discounts.
“The entire ecommerce game is played on sale days, leading to sudden spike in orders. On the days following a sale, these companies want us to deliver thousands of packages to remote destination within the time frame they have promised their customers,” said the head of a leading logistics company, who did not want to be named.
“We cannot hire delivery boys for a week when the demand and then pay them salaries throughout the month, when there is no work.”
While several e-commerce players have in-house logistics capacities, most of them depend — at least partially — on third-party vendors. Snapdeal does not have a captive delivery unit and relies on private courier companies completely. While Flipkart delivers 65-70 per cent of its orders through its captive logistics unit, e-kart, it works with logistics players for the rest. Amazon, which is also working to strengthen its delivery capacities, currently has a significant dependence on third-party vendors.
Holding discounts on dedicated days have been the mantra for boosting sales for most of the leading e-commerce players in the country over the last few months.
The trend started when Flipkart saw an unprecedented response to its Big Billion Day in October 2014. The company had said that it clocked a revenue of $100 million in only 10 hours on the day of the sale.
Post the Big Billion Day success, Snapdeal hosted a Savings Day in November, while Amazon India had hosted Diwali Dhamaka during the same period.
“We believe that at the time of signing the contract, most organised players make their capacities and limitations clear to the client. After that, if there is a sudden spike in demand, you cannot suddenly pick up delivery boys from the street,” said Vijay Kumar, the chief operating officer of Express Industry Council Of India, a body representing privately run courier companies in the country.
“The e-commerce industry is at a nascent stage so obviously there are certain lags.”
