Booming online orders, Boost E-commerce logistics
During the coronavirus pandemic in Bangladesh, e-commerce logistics companies that serve online businesses continued to thrive as more customers switched to online services to make purchases.
The ability to shop for most items from the comfort of one’s own home is a major factor driving the massive growth of online shopping sites and f-commerce.
Furthermore, since the products are delivered to their doorstep, usually by individual delivery aggregators, online retail platforms allow people to avoid the risk of infection.
According to industry insiders, this resulted in a 50% rise in home deliveries during the Covid-19 pandemic.
AKM Fahim Mashroor is the founder and CEO of the e-commerce company AjkerDeal, said The Daily Star:
“Logistics companies related to online sales have huge potential in Bangladesh as e-commerce currently accounts for just one percent of the total retail sales, “That’s why many new players are coming into the business while existing players are ramping up their capacities”
Strong and efficient E-commerce logistics facilities have been instrumental in the growth of the local e-commerce industry
Similarly, the rise of logistics behemoths such as Delhivery, Ecom Express, and Shiprocket in India, and Cainiao and JD Logistics in China, has been fueled by e-commerce.
In January, Indian end-to-end e-commerce logistics solution provider Ecom Express purchased a majority stake in Bangladesh’s home delivery service provider Paperfly for about Tk 100 crore, sensing the huge potential of logistics in Bangladesh.
Ecom Express is making its first foray outside of India by entering Bangladesh.
The key obstacle for the growth of e-commerce in Bangladesh, and thus logistics, according to Rahath Ahmed, co-founder, and chief marketing officer at Paperfly, is to create a diverse range of sellers.
Since its inception in February 2016, has expanded to almost every union in Bangladesh and made 48 lakh deliveries. The company now, makes about 15,000 deliveries across all 64 districts, with 90% of shipments going to locations outside of Dhaka.
Experts agree that for most logistics and e-commerce aggregators, faster delivery is the secret to success.
Pathao, which is best known for its ride-sharing service, began as an e-courier network in 2015.
Hussain M Elius, CEO of Pathao, which delivers goods to almost all districts but is predominantly concentrated in Dhaka, Chattogram, and Sylhet, said that,
“In the last few years, logistics services have boomed,”
According to him, expanding the platform’s operations faces two major challenges: the first is the cash-on-delivery option, and the second is lower orders in some regions.
The pandemic has been a boon for the Dhaka-centric company as the number of daily deliveries soared to 8,000 in June last year, up from 5,000 in the pre-pandemic era.
eCourier, a logistic provider now makes over 3 lakh deliveries every month, with nearly 90% of them taking place within Dhaka. Since its inception in 2014, the company has completed 46 lakh deliveries.
Redx, a logistics courier service company, delivers e-commerce and f-commerce goods to consumers’ homes through the country’s eight divisions. It charges Tk 70 for one-kilogram parcels delivered within Dhaka and Tk 150 for parcels delivered outside the Dhaka division, which is less than some of its rivals.
Industry insiders believe that the costs of logistics facilities in Bangladesh are much higher than in other countries, which is hurting the country’s e-commerce industry.
AjkerDeal’s Mashroor, the pioneer in the local tech-based start-up scene and has deep knowledge about the industry. said The Daily Star, that,
“If a customer outside Dhaka orders a Tk 300 shirt, he often has to spend Tk 140-150 on logistics. So, it will have to be reduced a lot more,”
He emphasized private-public partnerships building in this regard. He also added that,
“There are more than 9,000 post offices in the country. If they have an agreement with logistics platforms, then logistics services can be provided across the country for a far lower cost,”
Customers invest just 5% of a product’s value on logistics on average around the world, whereas, it’s around 20% in Bangladesh.
During the lockdowns in April last year, Foodpanda, the industry leader in terms of food distribution with a presence in all 64 districts, launched a grocery delivery arm by partnering with stores such as Shwapno, Bengal Meat, Unimart, and Lazz Pharma.
Foodpanda also provides groceries, medications, and other essentials as the pandemic has increased the number of home deliveries for everyday necessities.
Daraz, the country’s largest e-commerce firm, is also expanding its logistics capabilities.
Daraz announced plans in June last year to invest Tk 500 crore by 2021 in logistics infrastructure to help extend its scope to all districts as part of its vision to create a better e-commerce logistics environment and develop a countrywide logistics infrastructure.
Syed Mostahidal Hoq, managing director of Daraz Bangladesh, a subsidiary of Alibaba, the Chinese e-commerce giant, said that,
“Now we are equipped with the logistic infrastructure that Alibaba uses,”
Daraz also uses independent e-commerce logistics suppliers for some deliveries since it handles over 60,000 orders a day. As a proof of how booming orders bolster E-commerce logistics at present.
Mehjabin Zaman Mahee
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