Till date the choice for all e-commerce companies so far has been between a captive or a third-party logistics (3PL) network. A captive network offers a high degree of control, it is an expensive and time-consuming arrangement with high overheads. Where as, a 3PL arrangement provides the benefits of lower operating costs and the flexibility to expand coverage as business needs.
Snapdeal is India’s leading value e-commerce platform, which draws more than 80% of its users from outside the metro cities and over 70% of its orders come from cities/towns with a population of less than 1 million. According to a report released by the global consulting firm Kearney in August 2021 has stated how India’s aspiring and mass households in Tier 2-4 cities and rural areas are driving the growth of value e-commerce in India.
While this segment accounts for only 16% of value e-commerce demand today, Kearney also estimates that this group of consumers will account for nearly 50% of value e-commerce demand by 2030. Now Snapdeal has leveraged a new technology and its collaborative business model called UniMove which will help in developing a logistics platform that is well-suited to serve the needs of these customers in a cost-effective manner and with high service levels. Till date the choice for all e-commerce companies so far has been between a captive or a third-party logistics (3PL) network.
Till date the choice for all e-commerce companies so far has been between a captive or a third-party logistics (3PL) network.
A captive network offers a high degree of control, it is an expensive and time-consuming arrangement with high overheads. Where as, a 3PL arrangement provides the benefits of lower operating costs and the flexibility to expand coverage as business needs. However, the stand-alone operations of 3PLs mean that e-commerce platforms have limited control and visibility of the logistics operations.
This results in the inability to adequately respond to clients about the delays in their orders, resulting in a deterioration of customer experience. Let us tell you that Snapdeal is delivering to India mass households in Tier 2-4 cities and rural areas by engaging with local and regional logistics players who are intimately familiar with the intricacies and nuances of the areas they serve. In an traditional 3PL arrangement, where the e-commerce platform takes a back seat, Snapdeal continues to remain fully aware during the fulfillment process even as actual ground operations are handled by the 3PLs. Now the question arises is how does Snapdeal do this? Snapdeal will do it simply by combining the local expertise of its logistics partners with the control and efficiency of its proprietary logistics technology solution – UniMove.
Snapdeal will do it simply by combining the local expertise of its logistics partners with the control and efficiency of its proprietary logistics technology solution – UniMove.
