Delhivery’s Sahil Barua said the firm will focus on delivery of items in 2-4 hours.
A rise in express parcel shipments underscores the growing demand for faster deliveries in the e-commerce and courier shipping space.
Sowmya Ramasubramanian
Published2 Aug 2024, 05:41 PM IST
Delhivery’s express delivery vertical saw its Ebitda profitability improve by nearly 18% in the April-June period.
Logistics firm Delhivery is set to launch a network of shared dark stores to enable e-commerce firms and direct-to-consumer brands to fulfil faster deliveries, chief executive Sahil Barua told investors during the company’s first-quarter earnings call.
While the company already offers its warehouses to quick-commerce companies, the new network, coupled with last-mile delivery, will provide direct-to-consumer, or online-first, brands the chance to reach their products to consumers much faster, Barua said.
The Gurugram-based firm said it will provide dark stores along with delivery service to help ease operating costs for e-commerce companies.
However, Barua cautioned that the need for non-grocery items within minutes was “relatively narrow” in terms of category and geographical penetration.
“Certain categories like apparel don't necessarily lend themselves to the quick-commerce model at all. The fundamental tenets of quick commerce is that inventory has to be fast-moving. But the reality is that a lot of inventory in e-commerce is not fast-moving,” Barua said, adding that he does not believe that delivery timelines of 30 minutes or 1 hour will “massively disrupt” e-commerce.
In fact, the move is unlikely to be a significant driver of revenue in the short or medium term, according to the chief executive.
Instead, Delhivery will focus on ‘rapid delivery’, which refers to delivery of items within 2-4 hours, allowing for better route optimisation and consolidation resulting in better unit economics.
“I don’t believe the unit economics for low-value products in sub-one-hour or sub-30-minute deliveries without significant value density are going to work out,” Barua said.
Mint reported last month that many consumer brands, including Nykaa and Purplle, are looking to set up a dense of network of dark stores in collaboration with logistics players by cross-utilising warehouses.