Courier company DTDC has launched a specialised service for the growing ecommerce industry in India. The service, called DotZot, will provide delivery services for ecommerce players across the country. Former top leader of TNT India, Sanjiv Kathuria will head Dotzot.
This is a game changer.
For ecommerce players in the country, logistics has been a major pain. Large companies like Flipkart and Jabong have their own logistics divisions. However, smaller companies struggle with multiple logistics providers.
The lack of good logistics in tier II and tier III cities is also a big hurdle when ecommerce begins to look beyond metros to grow.
More over, when the whole ecommerce industry is slowly pivoting to a marketplace model where they have to deal with multiple suppliers and logistics players, it makes sense for smaller players to outsource their logistics than spend on building in house logistics.
DTDC is a formidable player in the logistics segment with thousands of franchises across the country. The advantage they have over others is that they have a physical presence in areas they operate and this will make reverse logistics much easier to handle.
While this will equip smaller ecommerce players for a better play, larger ones like Flipkart and Myntra are likely to face increased competition. This will commoditize the ecommerce logistics business and the ecommmerce leader Flipkart may lose one of its key differentiators as other logistics players begin to offer similar services and competition drives rates down.
Rocket Internet backed ecommerce company Jabong has already launched its value added services which include outsourced customer service and logistics.
American retail giant Amazon is also said to be readying its entry into India. When it does, Amazon will definitely not enter as a pure play ecommerce company. It will bring Amazon Fulfillment services, the logistics arm of Amazon, for merchants in India (has already built its warehouse).
Is DTDC a bit late to the party, now that the ecommerce (investment) boom is over?
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