E-Commerce

Will spend over $100 million on supply chain this year: Rohit Bansal, Snapdeal

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"E-commerce-focused fulfilment startups have come into the picture, but the level of specialisation in e-commerce logistics needs to further increase."

Online marketplace Snapdeal has become one of the largest clients for ecommerce logistics companies in India. The Delhi-based company, unlike rivals Flipkart and Amazon, outsources its entire logistics.

Snapdeal's co-founder and chief operating officer, Rohit Bansal, 31, talks about what will happen next in India's ecommerce logistics. Edited Excerpts:

What more needs to be done in ecommerce logistics?

Supply chain is the backbone of ecommerce, as important probably as network coverage for mobile companies. First is sheer capacity. There is also need for a lot of processes and specialisation in supply chain.

Ecommerce-focused fulfilment startups have come into the picture, but we feel the level of specialisation in ecommerce logistics needs to further increase. Each of the parts of supply chain, like warehousing, is going to be big. In last mile too more specialisation will emerge, like companies focused on a region or a type of fulfilment.

What are the kind of innovations you forsee?

I think the next level of innovation will be based on the nature of products sold online. Not everything is fulfilled the same way. Ecommerce started with very small products, but now the spectrum is wider.

The way a refrigerator is fulfilled versus the way a pen drive or a mobile phone or a piece of jewellery or a crockery set is fulfilled are very different from each other. This will lead to a lot of innovation in packaging and in fulfilling. It will be on these tracks that ecommerce logistics companies will start getting differentiated over a period of time.

In terms of transport of goods, with air capacity a concern, what more needs to be done?

That's another very important part. Our concern is that the size of the ecommerce business in the country is probably going to outrun the flight capacity available right now. A few things will happen as a result. One is probably more dedicated air cargo companies will get added. Second, is the increased use of rail and road transport for fulfillment.

What about India Post as a solution?

We are piloting with them. They are now seeing ecommerce as a big opportunity. They have started selling stamps online with us. Obviously, given the size of the network, there are obvious complexities involved. If they make it work, it will really enable the growth as no one else has or can in the foreseeable future.

How much are you spending on logistics?

We had earlier mentioned that we would end up spending Rs 450 crore in supply chain this year. But, with the kind of sales happening, we may well end up spending somewhere between $100-125 million (Rs 600-760 crore) in supply chain.

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Editorial Team

The SupplyChains Magazine editorial team takes great pride in bringing you the best information to help you succeed in your supply chain, logistics or procurement functions. Together, our editors and contributors have more than 50 years of supply chain industry knowledge to share with you.

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