In this interview, Sunil Talvadkar, Managing Director, Logistics Solutions Group (LSG), discusses the companyâ€™s growth plans, emerging trends in the logistics and supply chain industry and impact of GST.Â
Q- What are your views on the current scenario of the Indian logistics industry?
A- The e-commerce logistics industry is going through a massive change with the onset of digitisation and big players foraying into the sector. The e-commerce retail market is among Indiaâ€™s fastest growing markets.Â It has grown at an astounding pace over the last three years, touching a gross merchandise value of $15 billion and has given rise to a new category of e-commerce focused logistics companies. The market in India was estimated at USD27.5 billion in 2016, and is expected to grow at a CAGR of 31 per cent to touch USD80 billion by 2020. We have also seen large e-commerce vendors make strategic investments in other logistics and startup companies. Most players are looking at a sustainable supply chain in order to ensure that the customers get that value adds. Logistics is a key enabler of e-commerce and also a source of competitive advantage and differentiation. The sector has a massive potential to grow and opportunities are there in innovation and disrupt. It is still a large market opportunity up for grabs but requires a relentless focus on execution and long-term value creation.
Q- Could you describe your organisationâ€™s mission and activities?
A- TOPSGRUP started their Logistics Services Group in 2016. Since then, the vertical has seen massive growth mainly because of the massive demand. The companyâ€™s focus has been in Tier II, III and IV markets which give us the advantage of covering that extra mile. For us, our mission is to provide sustainable service to customers, offer seamless delivery process which in turn proves to be profitable to us as well. We have already been working with 251 distribution hubs across, 30,000 locations and deployed 1500 delivery boys. The company has been doing approximately 50000 shipments in a day which is expected to rise during the festive season. We are working with some of the top players in e-commerce business.
Q- What role does digitisation play for innovation in logistics and supply chain?
A- Innovation is the key to achieving a real advantage in logistics and supply chain. Big data, Internet of Things and Industry 4.0 are only some of the drivers here. Customers are using technology with the help of real-time tracking, demand planning, and others. Digitisation brings down those walls, and the chain becomes a completely integrated ecosystem that is fully transparent to all the players involved – right from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers. The goal of the digital supply chain is ambitious: to build an altogether new kind of supply network thatâ€™s both resilient and responsive.
We are working with some of the top players in e-commerce business.
Q- How does your offering vary from others in the market?
A- At TOPSGRUP, we believe in customer satisfaction. We thrive on sustainability and retention of staff. We provide vocational training to individuals who train at TOPSGRUP with our skill development program which is in association with the Government of India. Because our training is so efficient and well structured, individuals have a higher retention with us.
Q- What are the challenges you comprehend in the Indian market?
A- E-commerce logistics service providers need to keep pace with the changing needs of the business, whether the launch of value added services to match growing customer expectations or expanding reach into the semi-urban/ rural areas to enable new customer acquisition. The other challenge unique to India is the lack of address standardisation, and also 20â€“30 per cent of addresses given by customers have inaccurate pin codes. It is estimated that on average a delivery person ends up making 2â€“3 calls to a customer and spends 5â€“7 minutes more per package delivery just to find the customer location.Â Also, the demand from Tier-II and beyond will be highly disaggregated because it will be originating from more than 4500 small cities and towns.
Q- How is GST benefiting the logistics sector so far?
A- GST implementation has created both palpable excitement as well as apprehension. The introduction of GST will further give impetus to the transport and logistics industry in India. Reduced tax, non-border country, less paperwork, all warehousing is streamlined and transparent procedure are some of the benefits of GST.
Because our training is so efficient and well structured, individuals have a higher retention with us.Â
Q- How is e-commerce driving growth for the logistics industry?
A- Recently a logistics report by Singhi Advisors mentioned that the fast-growing e-commerce sector will drive the $167-billion domestic logistics industry going forward and the introduction of the Goods & Services Tax which will unify the markets, will be the biggest push for the sector. Addressing the rapidly evolving market of e-commerce in the country, third-party logistics is emerging as the primary driver for Indian e-commerce.Â
Q- According to you, what positives do you see in the Indian markets that provide an impetus to the logistics sector?
A- The consumer is getting more knowledgeable day by day and with easy access to credit their spending power is increasing which gives them the liberty to consume more. The access of ecomm â€“ logistics has moved to hilly areas too. Mobile consumption and penetration has reached its new high. The small startups have now become e-commerce giants in the space.Â
Â Mobile consumption and penetration has reached its new high. The small startups have now become e-commerce giants in the space.