Startup Chronicles: — Creating a Seamless Last-Mile Delivery Revolution

The growing popularity of the e-commerce retail landscape in India has necessitated a change in how a retailer’s supply chain approaches last-mile delivery logistics. Conventional delivery methods are rapidly being replaced by a new generation of startups that offer smart solutions for tackling challenging last-mile delivery issues, such as an exploding population in urban areas and the security risks with multiple deliveries in gated communities.

Today’s digital savvy customers are seeking flexible delivery solutions that offer same day or free delivery options from e-retailers. The demand has necessitated the requirement for efficient ‘last-mile’ delivery solutions that don’t put a strain on a company’s logistics and supply chain framework. The advent of last-mile delivery — previously the mainstay of brick-and-mortar retailers — has upped the game in the online space, with a whole wave of startups jumping into the fray to fulfil the exacting delivery needs of consumers. Further, the burgeoning online retail market in India has prompted startups to innovate in this space, experimenting with various business models, such as crowdsourcing, third-party logistics, traditional last-mile delivery operations, delivery through pick-ups and the customer pick-up model.

The global last-mile delivery market is gaining in popularity and is expected to reach $45.27 billion by 2027. To compound this, a quarter of the world’s population is expected to reside in its 600 largest cities. The exploding urban landscape will open up a vast market for disrupting the last-mile operations of e-retailers. Last-mile is the last leg of delivering products purchased online to customers, and is dependent on reliable manpower and infrastructure.

Sensing such trends, in 2018, Hyderabad-based entrepreneur Srinivas Madhavam found the time opportune to launch his startup Exprs that sought to disrupt last-yard delivery logistics as we know it. He believed the time was ripe to apply innovation in this segment to reduce the existing operational and cost challenges faced by e-retailers.

Having run VDeliver, an on-demand hyperlocal delivery service for over seven years, Srinivas’s new startup aspired to cash in on the explosion in the residential and commercial real estate market, largely an outcome of a growing urban population. “Similarly, e-commerce buying trends have been accelerating steadily, which has opened a vast last-yard delivery market for us to explore,” says Srinivas. According to him, there is immense scope for building India’s largest grid of nano distribution network. “Most of the e-commerce companies spend a lot in handling their last-mile operations. It can be handled by a nano-distribution network, such as ours, making the process far more profitable and productive,” he reasons.

The complex nature of last-mile deliveries

Studies have shown that last-mile deliveries are complicated to pull off and make retailers incur close to 50 per cent of the total logistics cost. The complexities increase in the modern-day urban context. Gated communities, commercial hubs and densely populated areas could pose logistical nightmares for companies that provide ‘gate-to-door’ deliveries. Various issues like poor visitor entry management, difficult-to-locate addresses, unavailability of customers and unavailability of cash are common hurdles experienced by delivery staff in the last yard of the delivery process.

Exprs was conceptualised to counter the problem and streamline the ‘gate-to-door’ delivery landscape. “Exprs stands for speed and priority. We want users and partners to trust us that we would deliver every package with the utmost care and faster than anyone else,” says Srinivas.

How Exprs works

Today’s apartment communities face a common problem: the potential security risk for residents from random strangers who gain entry inside the complex to deliver packages till the customer’s door.

To counter the problem, Exprs has partnered with leading gated communities and set up a micro warehouse (a compact room) inside the gated community, for which the startup pays nominal rent. The startup ensures that two of its delivery executives are stationed at these centres from morning to night to deliver the packages to the customer’s doorstep. Thus, the startup’s delivery executives are the only persons in charge of handling the gate-to-door delivery for customers, ensuring the security of all residents.

Similarly, Exprs has also partnered with technology parks and large office complexes. Exprs’s authorised delivery executives who are stationed in these office locations collect the employees’ packages from outside delivery executives. The employees can pick up their packages from the on-campus location at their convenience, during office hours.

“Our grid enables employee productivity by giving the convenience of parcel delivery beyond business hours,” says Srinivas. “Exprs fulfils at least 80 per cent of daily deliveries by 11 am and often delivers the packages faster than our e-commerce partners’ direct delivery systems. The undelivered packages are swiftly delivered as per customer requests during the rest of the day. So, we have named our startup Exprs as speed is our priority and our USP.”

According to Srinivas, the solution offered by Exprs has made the last-mile ecosystem significantly more efficient and mitigated the security risk. The other benefit can be seen in eliminating the security loopholes in the gated communities by avoiding multiple entries by strangers.

In the brief time that Exprs has been around, the company has partnered with leading e-commerce players including Amazon, Flipkart, Myntra, Bluedart and Delhivery, among others. They are also associated with some of the country’s leading builders, including Brigade, Divyasree, Embassy, DLF and RMZ — across Hyderabad, Bengaluru, Chennai, Mumbai and Kolkata. Exprs is also aggressively working with the Indian Railways, and Hyderabad and Bengaluru metro stations to expand its reach. Currently, Exprs is present across 70+ points in five cities, catering to more than a million eCommerce users.

Thus, Exprs caters to direct-to-consumer (D2C) online retailers by setting up ‘nano distribution centers’ (NDCs) in apartment communities and large office complexes where customers have easy access to the delivered product. Though still nascent in the industry, this reflects a growing global trend that aims to improve the customer experience by allowing products to be delivered to consumers through bypassing the daunting challenges faced by regular delivery executives, such as traffic and pollution.

The city and its ecosystem

Srinivas co-founded Exprs along with seasoned entrepreneur Srikanth Rajshekhar and technology veteran Rahul Mehta. The company was started by raising funds from the founders’ friends and family network who saw the enormous potential the market and the startup’s model had to offer. The startup recently raised a seed round and an angel round and proposes to seek more funding for scaling the company.

According to Srinivas, Hyderabad was the logical choice of location as his founding team was already well-versed with the strategic locations the city offered and could fall back on strong industry associations for forging future partnerships. He says, “Hyderabad is also home to many prospective units of services, some of the most innovative startups, accelerators and venture capitalists, who we were confident would help us grow in the future.”

Exprs is a part of the third cohort of T-Hub’s flagship Lab32 program. Srinivas acknowledges the pivotal role played by T-Hub in his entrepreneurial journey. “The hunger to learn more and to get connected to the vibrant startup ecosystem led us to be a part of T-hub’s Lab 32 program,” he says. “It has been great learning from peers, other startups, mentors and the whole network at Lab32.”

Srinivas adds that the association with T-Hub has led to networking opportunities with Telangana bureaucrats and industry leaders. “It gave us a platform to groom our leadership, storytelling and selling skills,” he says.

Till date, Exprs has focused on hyper-local marketing techniques, including target marketing, offline ads, community building, conducting events and speaking engagements. The startup is also closely working with the Government of Telangana, the local police and women’s security cells to increase the safety and security of delivery executives across the city. “We leverage industry connects and strongly believe in collaboration to achieve mass expansion,” reveals Srinivas.

He adds that the company’s delivery executives — especially the women — find their approach to last-mile delivery safer than the conventional methods used by e-commerce players. Further, the delivery agents cut down on their commuting time and enjoy a secure, pollution-free ‘office’ space for the entire day.

Tackling challenges en route to growth

Exprs currently has a fleet of 200 delivery executives who are placed in gated communities and mammoth secured office complexes like technology parks. A major challenge faced by the company is in the optimum allocation of the delivery staff to ensure that they are engaged for all the clocked-in hours, thus, maximising their productivity and cutting down company costs. The startup is also trying to find a solution for instances when multiple deliveries to the same customer occur within staggered intervals. Another challenge lies in simultaneously dealing with multiple stakeholders, including management committees, residents and e-commerce clients to ensure seamless deliveries that offer a delightful customer experience.

“We are proactively utilising technology and software to establish a fool-proof system that accounts for every step of our operation,” explains Srinivas. “Our delivery staff check-in each package in our ‘Exprs Point’ app that can be tracked by the customer and us. We have also been working on relocating our delivery staff, according to the fluctuating demands in our other nearby hubs.”

Miles to go…

As the next step, the startup is in the process of introducing Exprs mobile delivery vans or ‘hubs’ in a few locations. It gives the startup’s delivery executives the flexibility to move between multiple locations. The need for such mobile hubs was felt when Exprs was unable to secure a physical location for its delivery executives inside gated communities and office complexes due to the unavailability of extra space.

“We want to create a grid of nano distribution centres connecting every high-density point with utmost efficiency and convenience,” concludes Srinivas. “First-mile deliveries and early morning deliveries are all logical extensions of the business that will be explored.”

The e-commerce retail industry is poised to grow at a brisk pace, primarily due to the increasing Internet penetration that has changed the way consumers shop. With more people shopping online, the logistics needs of e-commerce players has also evolved, leading to innovations such as last-mile delivery models. Even as cities prepare for further e-commerce growth, the demand for last-mile delivery is expected to grow by 78 per cent globally by 2030. However, it still remains to be seen which of the last-mile innovations, including nano-distribution network, drones and droids, among others, will evolve as the fastest-growing segment in the years to come.

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