The friendly neighbourhood kirana store is getting increasing attention from ecommerce behemoths such as Amazon India and Myntra for handling the last leg of their deliveries.
Ecommerce companies have over the past year significantly scaled up their use of this channel for last-mile delivery, allowing them to reduce their delivery staff or engage them for more advanced tasks. Amazon engages its neighbourhood store network for onethird of its deliveries, and Myntra for about two-thirds, according to industry estimates.
Amazon’s ‘I Have Space’ (IHS) programme grew 40% year-onyear to 17,500 neighbourhood stores in 225 cities at the end of 2017, wherein it partners with local stores that will deliver products to customers within a 2-4 km radius.
Flipkart-owned Myntra has expanded its ‘Mensa Network’ to 6,200 stores in 50 cities since it was launched in April last year, and about 60% of its orders are fulfilled through it. Flipkart said its alternative delivery network, which includes Apollo pharmacy stores, handles 20-30% of its deliveries during its peak festive season sales.
“Unlike what is said about ecommerce impacting the small kirana store, this programme has helped find a new use case for them, where they can also get predictability of revenue,” said Manpreet Ratia, head of supply chain, customer experience and human resources at Myntra. “(Flipkart and Myntra) leverage each other’s capacities. We have shared our learnings from the Mensa Network with Flipkart.”
The fashion retailer’s neighbourhood store partners earn `15,000 a month on an average, and the income increases in geographies with higher volume of deliveries, he said. Amazon did not disclose how much of its deliveries are handled by its store network.
REDUCING STAFF COUNT
The company said it chooses mode of transportation based on variables such as time commitment, past performance and fulfilment cost. Amazon’s store partners deliver 20-30 packages a day, the company said, which is as much as average deliveries handled by last-mile delivery staff. “These local entrepreneurs understand their area well and have immense goodwill in their neighbourhood to efficiently deliver and receive products,” an Amazon India spokesperson said. “Some of t ..
Amazon is set to brand these IHS pickup stores as ‘Amazon Pickup’ for easy visibility, the company said. Akshay Sahi, head of Amazon Prime in India, had told ET in March that the company was looking to spruce up its pickup points to improve the last-mile service for customers as well as discoverability of these pickup points during online checkout. This store network model has also helped the ecommerce companies streamline last-mile delivery staff.
Amazon has reduced the size of its last-mile delivery staff to 4,000 from 12,000 in 2016, as per industry sources aware of the development, who attributed the decrease also to the company working more with third-party logistics firms. Amazon did not offer a specific comment on this, stating that it had thousands of delivery associates. Myntra said it has been able to divert much of its delivery staff to handle tasks such as try-and-buy orders as well as quality audits during product returns.
It’s not just kirana stores that ecommerce firms are leveraging. Neighbourhood outlets such as pharmacies, mobile accessories stores, tailoring shops, and laundries are being roped in for lastmile deliveries. Investments in building these networks include operating costs such as employing field staff for delivering and reconciling orders, creating apps and tech for the store partners, and sharing training content on customer management. Industry experts say there could be a larger play for companies such as Amazon in offering financial services such as credit or working loans to kirana stores, as well as providing inventory.
Ecommerce shipments handled through the neighbourhood store channel increased 7-5% over the last year, according to Guruprasad Srinivasan, president of Dependo Logistics, a subsidiary of Quess Corp. “Overall, about 10% of ecommerce orders are being done through this network, and it is expected to grow,” he said. However, the model may not have worked for everyone.
Online grocery BigBasket piloted a similar network of partner stores two years ago, called ‘AasPaas’, but discontinued it after seeing little customer traction. “We didn’t find many customers interested in this option and hence we don’t do this now,” said TN Hari, head of human resources at BigBasket.
Ecommerce companies have over the past year significantly scaled up their use of this channel for last-mile delivery, allowing them to reduce their delivery staff or engage them for more advanced tasks. Amazon engages its neighbourhood store network for onethird of its deliveries, and Myntra for about two-thirds, according to industry estimates.
Amazon’s ‘I Have Space’ (IHS) programme grew 40% year-onyear to 17,500 neighbourhood stores in 225 cities at the end of 2017, wherein it partners with local stores that will deliver products to customers within a 2-4 km radius.
Flipkart-owned Myntra has expanded its ‘Mensa Network’ to 6,200 stores in 50 cities since it was launched in April last year, and about 60% of its orders are fulfilled through it. Flipkart said its alternative delivery network, which includes Apollo pharmacy stores, handles 20-30% of its deliveries during its peak festive season sales.
“Unlike what is said about ecommerce impacting the small kirana store, this programme has helped find a new use case for them, where they can also get predictability of revenue,” said Manpreet Ratia, head of supply chain, customer experience and human resources at Myntra. “(Flipkart and Myntra) leverage each other’s capacities. We have shared our learnings from the Mensa Network with Flipkart.”
The fashion retailer’s neighbourhood store partners earn `15,000 a month on an average, and the income increases in geographies with higher volume of deliveries, he said. Amazon did not disclose how much of its deliveries are handled by its store network.
REDUCING STAFF COUNT
The company said it chooses mode of transportation based on variables such as time commitment, past performance and fulfilment cost. Amazon’s store partners deliver 20-30 packages a day, the company said, which is as much as average deliveries handled by last-mile delivery staff. “These local entrepreneurs understand their area well and have immense goodwill in their neighbourhood to efficiently deliver and receive products,” an Amazon India spokesperson said. “Some of t ..
Amazon is set to brand these IHS pickup stores as ‘Amazon Pickup’ for easy visibility, the company said. Akshay Sahi, head of Amazon Prime in India, had told ET in March that the company was looking to spruce up its pickup points to improve the last-mile service for customers as well as discoverability of these pickup points during online checkout. This store network model has also helped the ecommerce companies streamline last-mile delivery staff.
Amazon has reduced the size of its last-mile delivery staff to 4,000 from 12,000 in 2016, as per industry sources aware of the development, who attributed the decrease also to the company working more with third-party logistics firms. Amazon did not offer a specific comment on this, stating that it had thousands of delivery associates. Myntra said it has been able to divert much of its delivery staff to handle tasks such as try-and-buy orders as well as quality audits during product returns.
It’s not just kirana stores that ecommerce firms are leveraging. Neighbourhood outlets such as pharmacies, mobile accessories stores, tailoring shops, and laundries are being roped in for lastmile deliveries. Investments in building these networks include operating costs such as employing field staff for delivering and reconciling orders, creating apps and tech for the store partners, and sharing training content on customer management. Industry experts say there could be a larger play for companies such as Amazon in offering financial services such as credit or working loans to kirana stores, as well as providing inventory.
Ecommerce shipments handled through the neighbourhood store channel increased 7-5% over the last year, according to Guruprasad Srinivasan, president of Dependo Logistics, a subsidiary of Quess Corp. “Overall, about 10% of ecommerce orders are being done through this network, and it is expected to grow,” he said. However, the model may not have worked for everyone.
Online grocery BigBasket piloted a similar network of partner stores two years ago, called ‘AasPaas’, but discontinued it after seeing little customer traction. “We didn’t find many customers interested in this option and hence we don’t do this now,” said TN Hari, head of human resources at BigBasket.
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