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‘Uniform GST vital for online shopping industry’ - 2012-09-05

As e-commerce picks up in India, Blue Dart Managing Director Anil Khanna tells Business Line how this new segment is changing the logistics market. For Blue Dart, a Rs 1,500-crore listed firm in which DP DHL has a majority stake, e-commerce is one of the fastest growing segments.

Khanna declines to share customers’ names but says that Blue Dart provides services to “the best and biggest” companies in the space of books, discounting, fashion and accessories, shoes, and electronics. He says the company has partnered with various e-commerce players to create simplified solutions that help them remain customer-centric and build a loyal customer base.

Edited excerpts:

How is business-to-consumer (B2C) e-commerce changing the logistics service provision market?

Currently in India, there are 10 million e-commerce users and the Indian e-commerce market is likely to grow to $25 billion from the current $10 billion. The domestic e-commerce market has the potential to grow between $125 billion and $260 billion by 2024-25. We witness key trends in the online buying and selling behaviour which are very indicative that e-commerce is catching up fast not just with those living in metros but also with those in middle India and small towns. E-commerce is one of the fastest growing segments for Blue Dart and we see a huge potential here contributing significantly to our top line.

For a logistics service provider, how does demand vary in the online retail segment?

In e-commerce, most of the action happens outside the Web. It is an industry which aims at maintaining zero inventories and achieving maximum reach and logistics plays a very important role in ensuring this. Delivery speed and customer experience are the two important factors that ensure success of an online retail venture.

And settling for a logistics player with the right expertise and network is a very crucial decision for the portal to make. Logistics players have also realised the potential this sector holds and have ensured that they have products and services and also plans chalked out that would service this sector, now and into the future.

What are the challenges? The growth in India in this segment — how does it compare with other countries?

The e-commerce industry in India is set for a boom time. The rate at which it is growing has prompted logistics firms to invest considerably in this space.

In the online shopping industry, especially, the need of the hour is a uniform goods and services tax across the country. Also, the logistics sector is witnessing infrastructure issues. Infrastructure is in a development stage in our country and bottlenecks emerging out of it are one of the major constraints the industry faces today both in air and on surface. Space at airports, airside and city-side infrastructure is often inadequate.

In addition, parking bays, air-side/city-side access and traffic congestion adversely impact costs as well as service quality. Air express companies are constrained by the sizes of the facilities at the airports, as they have remained the same while the loads have increased manifold.

In an industry where space is a highly perishable commodity, any disruption in services, due to either natural disasters or manufactured reasons, affects us adversely, as the day’s capacity inventory is lost forever.

Do you have a dedicated team for handling e-commerce deliveries?

Blue Dart has set up a team of operations and customer service agents focused on meeting the needs of the portal, and providing a single contact to the customer. Regulatory processes are streamlined in advance to expedite movement between the various States of the country. A dedicated customer service team provides all the information needs of the customer.

What are some of the unique services that you had to design for this market?

Blue Dart offers the COD (cash-on-delivery) service primarily catering to the e-commerce industry. For an order placed, the invoice value of the shipment will be collected from the consignee in the form of cash at the time of delivery. The cash collected from the consignee will be returned to the portal to complete the transaction.

Blue Dart Express has been exploring Web-based solutions to extend the range of services available to its customers and integrate them into its core products.

Source : Hindu Business Line