Thursday 19 September 2019

E-commerce companies go the extra mile to ramp up delivery network

E-commerce companies go the extra mile to ramp up delivery networkKOLKATA: Ecommerce players are scrambling for delivery staff as they gear up ahead of what is the most crucial Diwali in years.

With the two largest online players, Flipkart and Amazon, leading the demand as they go head-to-head with their flagship sales kicking off on the same day, leading staffing firms say they are seeing a 20-30% jump in demand for last-mile delivery personnel this festive season.

“Ecommerce is leading the entire festive hiring. Overall demand for ecommerce delivery personnel during the festive period could be as high as 2,50,000-3,00,000,” said Yeshab Giri, vice-president at Randstad Technologies & Specialities.

“The Flipkart Group and Amazon are consolidating; moving beyond the urban cities and penetrating deeper into the smaller ones. We expect 20-25% growth over last year,” he added.

With an economic slowdown affecting consumer behaviour and, consequently, spending, businesses are hoping for the festival season to bring in a turnaround. Ecommerce, though, is expected to be less affected by the economic downturn as cautious customers look out for deals.

Amazon said it wouldn’t be able to share specifics of this year’s festive hiring yet. “We enhance our teams significantly with tens of thousands of seasonal associates working in the Amazon fulfilment network and customer service sites during the festive season,” a spokesperson said in an emailed response to ET’s questions.

In 2018, the company had 50,000 seasonal associates on board.

Amazon recently said it had deepened its delivery network and expanded reach for faster deliveries ahead of the festive season.

E-commerce companies go the extra mile to ramp up delivery network

Flipkart, which had not responded to queries at the time of going to press, recently said ahead of The Big Billion Day sale, it had scaled up its supply chain considerably, both in first- and last-mile delivery, largely in under-penetrated parts of India. The Walmart-owned company claimed it had expanded the delivery reach for large appliances by 80% to around 19,200 PIN Codes from about 10,660 in 2018.

Amazon’s Great Indian Festival and Flipkart’s Big Billion Day sale will both start on September 29.

A recent ET story reported that Flipkart and Amazon India were maintaining aggressive targets and expecting to post combined gross merchandise volume (GMV) worth about $5 billion (about Rs 36,000 crore) in October. Last year, the ecommerce industry registered 35% GMV growth and racked up sales of $3 billion during the festive season, as per estimates. Last-mile delivery is an important component of the overall piece.

“For the season itself, the number of package deliveries is expected to be among the highest ever. There will be a lot of value purchases through ecommerce,” said Lohit Bhatia, the president for workforce management at integrated business services provider Quess Corp. The company is witnessing a 25-30% increase in ecommerce delivery numbers, he added.

Others are scaling up as wellStaffing firms are feeding not just ecommerce companies such as Snapdeal, UrbanLadder and Pepperfry, but also ecommerce-supporting logistics providers including Ecom Express, Delhivery and Blackbuck, which can create up to double the number of indirect jobs.

With the inclusion of categories like furniture and large appliances on the list of products sold online, hiring is going to be more than 30% compared with last year, said Alok Kumar, a senior director at ManpowerGroup India. The demand is also going to be multiplied with Paytm Mall, added Kumar.

Urban Ladder CEO Ashish Goel confirmed the trend. “Diwali is very important for us. We will hire up to 30-35% more compared to last year,” he said.

“At a conservative estimate, peak demand for us will go up by 20-25%,” said Rituparna Chakraborty, a co-founder of TeamLease Services.

With the industry facing a manpower crunch, incentives including joining bonuses and retention bonuses are being doled out. Some firms are paying delivery staff around Rs 2,000-3,000 as joining bonus, with an extra Rs 3,000-6,000 added to the final payout as retention or exit-time bonus if they last for the entire season of around 90 days. That’s in addition to average pays of Rs 17,000-23,000 a month.

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