While the e-commerce space is growing, the players in the sector are also trying to remove certain pain-points from payments to delivery. While the problem of payments can be solved online, logistics is a physical challenge. It is also known as the back-bone of e-commerce sector and thus plays a major role in growth of the segment. As the sector matures, it is giving birth to several start-ups that are solely focused on solving the problem of delivery of goods from seller to the buyer. In the last few years, the delivery time too has reduced, from the earlier 10-12 days to now just two hours. This has been possible due to the emergence of hyperlocal start-ups that are focusing on providing services to the consumers within a certain city limit. One, among them, is Bengaluru-based Zaicus, a local logistics company offering to ship goods within the city limit.
According to industry reports, the intra-city logistics market is highly fragmented and pegged at $35 billion thus providing a huge opportunity to start-ups coming up in this space.
The company competes with other start-ups, such Moovo, Shippr, Blowhorn and Sequoia-backed Porter, among others who act as truck aggregators. Most of these start-ups have received substantial investments in the first year itself. Porter recently received Rs 37 crore from Sequoia.
Multi-layer optimisation
“While in the name of local logistics, everyone is building a truck aggregator, we are building a logistics company to move and deliver goods in urban areas. We are building a multi-layer optimisation model that can dynamically meet the demand coming from different areas of a city,” said Chandel, who before starting Zaicus worked with Traxcn, a venture that built technology to help VC and PE firms in discovering deals.
Transporting goods constitute one of the highest cost components of cost-of-goods-sold and supply chain. Besides, there are challenges, such as inefficient route planning, traffic congestion, volatile freight rates, fuel costs, capacity, and empty miles, among others.
Zaicus is working on planning efficient route scheduling, maximum capacity utilisation and reduce empty miles as well as manage transportation assets with an overall effect of reducing fuel cost and carbon footprint, Chandel said, adding that it employs data analytic techniques to predict and manage fluctuations in demand during different parts of the year to bridge asset availability – demand disparity at any given time.
Zaicus currently has about six to eight trucks and does 18-20 orders a day. It doesn’t own any of these trucks but has partnered with local truck owners. It connects customers with commercial vehicles for quick goods transportation.
It also offers features such as real time tracking and auto notification, kilometres travelled, login logoff time, transparent pricing with all legal and other documents on its app. In the near term Zaicus is going to begin operations in Mumbai as of next month.