Another exciting episode of ‘Original Conversation with Daraz’ is live now where Daraz recently had a panel discussion with the leading logistic companies of Pakistan like TCS, Rider, Movex, and leopard. The discussion was regarding the key area of e-commerce that is ‘Logistics’.
The paneled partners for discussion were, the Director E-commerce from TCS, Farrukh Nadeem, the VP of operations from LCS, Mohsin Ansari, the CEO of MovEx, Shafiq Malik, the CEO of Rider, Salman Allana, and last but not the least, the Head of Transport at Daraz, Talha Ahmed. They all discussed the logistical challenges and how to provide a better experience to customers and sellers.
The conversation started with discussing the importance of Logistics Support in e-Commerce companies and why is logistics such an essential function for any online or e-commerce platform that exists?
To this, Talha Ahmed, the Head of Transport at Daraz put his view forward by stating that, “From the retail landscape point of view things are evolving really fast, like 10 or 20 years ago, the retail landscape was driven by home and box stores; however, over the years what started happening is that these large groceries stores have started opening up and the shift has been moved from these home and box stores to these big stores like that are now in Pakistan such as Imtiaz, Al-Fatah, Shaheen in Islamabad, and many more.”
He further added that change and the shift in the market have already been started; however, this shift will now further move towards online just like it’s happening in the markets of Europe and Western America like Amazon is changing the landscape there.
But in Pakistan it can be any of the platforms either Daraz or any other player in the fashion or grocery industry can take the lead to change the landscape depending upon the parameters that we have right now, like the mobile penetration that we have in-country right now.
So it is extremely important o have that logistics infrastructure in that place so that when change occurs in the market, the logistics must be ready for that. It could be challenging not only for the company but for customers to behold, there is a possibility that if the logistics lack to adopt and execute the changes, the customers could revert back to old habits.
Moreover, according to Shafiq Malik, the CEO of MovEx, a serious transition happened whereas the Pakistani market missed it out, the mega malls created the all-in-one shopping experience like foreign and that was the time where the law and order of the country or investments were the issues for any businessman and due to this, we missed out on that. However, after that, the opportunity was created for businesses and customers to get the quick doorstep delivery of the product that helped the logistics as well as the e-commerce businesses.
He further added that “logistics is way behind and there is a lot that needs to be done in terms of creating new experience in terms of automation, technology, and the actual experience of delivering the product to end consumer. But where Pakistan had missed the mega mall opportunity like the foreign, Pakistan has gained the e-commerce online shopping experience and on-time delivery due to its logistics.”
All the e-commerce and logistics giants should come up together to properly identify the lacking areas of logistics and to simply invest in improving in those areas. It could be a great opportunity for all as a team for e-commerce logistic services.
Leopard Courier Service and TCS did not initiate their services as an e-commerce platform; however, their role in the leading e-commerce industry has now become prominent.
According to Mohsin Ansari, the VP Operations LCS, “we are in logistics for over 35 years and have said that the e-commerce market is not new now for everybody. LCS, as an organization realized this much earlier than the new startups coming into the e-commerce business.”
The best thing that LCS did and is still doing is the automation that helped them to connect the buyers and sellers through their logistics (delivery services). However, LCS is the only company that has the automated sorting system in Karachi that was the beginning of their official infrastructure. All the diameters were set according to the demands of the markets.
Logistics is the bridge between the buyer and the seller, as per Mohsin Ansari. However, as per him, LCS and all other logistic companies have more responsibility to pick up the product from the buyer and to deliver it to the customer on time. LCS worked on reach, the payment methods, as well as the technology that was really required for them to get into this business.
LCS redesigned their infrastructure as per the needs of the new emerging markets and they also gained the opportunity to interact and connect with the brands and organizations that require their logistic services to deliver the products. Technology has remained the key development part that is creating more opportunities for logistics partners to grow. Moreover, the whole logistics industry’s dynamics are changed during the COVID-19 pandemic and the significance of the logistics is now even stronger.
According to Farrukh Nadeem, the Director of e-commerce from TCS, “Delivery heroes like the riders are the first in fact the only face of experience for a customer for their online shopping.”
Because when a customer orders something online they just had to order with a few clicks but the whole logistics lies under the one scenario that is when the customer interacts with the delivery hero. If the delivery experience of the product is flawless just like you are getting the product from the store and the store is now coming to your doorstep that is all that matters.
According to Salman Allana, the CEO of Rider, “the physical parcels change hands more than 30 to 40 times and this is what logistics is!”
He further discussed the significance of the logistics as from getting the product from supplier to reaching out to store than to logistics companies, to the delivery hero and then to customers, the whole process is long and time-consuming so this is what logistics is known as. Just like from sourcing to warehousing to fulfillment, every step counts as a part of the supply chain.
There are many challenges that logistic companies face while delivering any individual product as well whether it’s rain, thunder, COVID-19, or anything, logistic companies tried their best to reach the consumer on time for the delivery of their product.
The delivery experience is what matters in terms of the customer will come back to the same store to shop online or switch the store due to delivery services. So, all the logistic partners try to meet the customer’s expectations for creating a flawless customer experience, as per Shafiq Malik.
Moving towards the next question, host Pireh Shafiq asked newcomers in the industry, Salman Allana and Shafiq Malik that what is attracting new entrepreneurs or businessmen to enter this logistics industry as many of the newcomers are joining the industry?
According to Salman Allana, when you want to enter into a logistics industry you decide one thing very earlier that is either you want to be a manpower solution provider or whether you want to be an efficient and experienced solution provider.
A manpower solution provider is as if you have 1000 manpower to work and you got one or any number of orders from any of the store like of Daraz then we will be having large manpower to fulfill the order. However, this is not a profitable way for any business because here we are not working on optimization or not focusing on customers’ experience. Moreover, it is a very small part of the bottleneck that manpower solution is without other aspects.
But now, from manpower solutions, the logistic companies are moving towards better customer experience and towards better e-commerce solution providers. It is a very different business from just delivering the product because the things are complex and complicated where the logistics companies have to deal with the limited access to shipper’s data or the addresses are not well defined to deliver the order.
The consignee’s addresses belong to rural areas do not have any exact house number usually and that is a huge challenge for a courier to deliver the parcel to the right person. But these opportunities are coming with various automated and systematic solutions.
Another question as a part of the conversation was an interesting one, Why is it important to have multiple logistic partners and a large network? Why there are multiple logistic partners of Daraz?
Talha from Daraz answered this question as, different logistic partners have different expertise as individuals; however, talking about TCS and LCS, Daraz gets an advantage of better reach and capacity by these two corporate courier giants as they are more able to handle and manage more capacity and better reach for Daraz.
Multiple partners are helping Daraz to deliver their products to more than 600+ cities of Pakistan. Multiple partners have strengthened the arms of Daraz to deliver the products on time and every partner works as per their capacity and expertise that benefits Daraz in many ways like for providing our products to customers domestically.
Another advantage of multiple partners is to have different packages those different logistic companies offer, like a flyer that is usually used to carry fragile items with safety or documents, different sizes of boxes as of different dimensions and weights, large or super boxes.
It is extremely important to have multiple partners on board that fulfill the customer’s demand or expectations.
Question regarding the Controlled Vs. Uncontrolled Marketplaces was asked to which Mohsin Ansari elaborated the key differences between both. Many people are currently working from an uncontrolled marketplace like Facebook, Instagram, etc. the social media platforms that are open to everyone to sell or buy goods. However, the controlled marketplaces running through official websites or apps are also emerging, like legal brands with better quality and value for money products.
The biggest thing here is the credibility because we all understand that both markets are emerging and we have all the opportunities to go good/bad or beyond in it. The visibility only happens when the goods are reaching the customers on time. However, there are a lot of challenges.
In controlled marketplaces, the brands usually have the physical existence that increases their chances to grow more. But the biggest challenge in an uncontrolled market is the ‘product’ because what the seller says and assures to be the product of good quality, must be there because the customer expects it to be what the seller has said to them.
But the massive challenge here for a logistic company is that they have to face the consequences if the product is not what the customer has ordered, that happens in uncontrolled marketplaces because the only face that customers interact with is the courier number. But clean business creates trust and this makes more profit even for the company. There is no control for uncontrolled sellers but if they will be honest they will benefit their business while benefitting the courier company also.
Cash on Delivery orders is more challenging because the only person who has to face the customer is the delivery guy from the courier company. Uncontrolled online businesses should create trust in order to support and grow the overall online buying and selling industry.
Daraz not only focuses on the customer’s experience; however, being a controlled marketplace, it also focuses on the seller’s experience. Giving proper training for basic online selling ethics and creating awareness regarding the online business is also a challenge for Daraz to satisfy customers as well as sellers so that both can take advantage of this platform. Daraz introduces dSat in order to prevent fake delivery attempts of counterfeit products.
Bulk deliveries for any seller have a limit set by Daraz just to make sure that the seller does not compromise the quality of the product or delivery of it.
Being 3PL partners improves customers’ experience because there is no such proof if the customer’s denied to accept that rider came at their place or customer was out of cash while receiving the COD parcel. In these situations, the control towers work well to get updated with the delivery of every specific parcel. If any of the things happened either customer is out of cash or doors were closed at the time of delivery no one was there to receive the parcel, all the updates are marked by the delivery guy.
Daraz Road to 11.11 is growing; however, the continuous preparations for 11.11 are done by the team and partner who are supporting Daraz in this journey. A new fleet like the new vehicles has also been added where the investments have been made on the expansion of the warehouses as well. The 3PL delivery staff has been allocated and a strong network has been made for on-time deliveries and better customer experience.