Flipkart, the online mega store of India has launched same day delivery in 10 Indian cities. The new model guarantees same day delivery and in a day delivery guarantee. If you order before 12 noon, your item will be delivered to you on the same day and if the order is before 6 PM, your item will be delivered on the next day.
However the same day guarantee never comes free. You need to additionally spend Rs.140 per item for same day and Rs.90 per item for the next day delivery methods. Rs.140 per item for the same day is an introductory offer which will be increased to Rs.200 per item later. As a launch offer, Flipkart also give up to Rs.5000, if your order is not delivered on the same day.
The service is available in Bangalore, Delhi, Mumbai, Kolkata, Noida, Gurgaon, Faridabad, Manesar, Navi Mumbai and Thane and will be scaled up to other cities soon. These are the places where Flipkart has its own warehouses available and makes it easy for the e-commerce player to deliver the products easily and sooner.
Amazon India and Snapdeal has already started same day delivery few months back. It’s interesting to see how customers are benefited from the same day delivery model and how many of us actually use this service. The additional shipping charges has been applied so that the customers don’t misuse the service and the company has the control over the service. This will bring additional revenues to the company.
Indian eCommerce Industry
Indian e-commerce industry is set to become $8 billion industry in the next 3 years and may reach $70 billion by 2020. There are around 200 million internet users in India currently and the number could grow to 500 million by 2015, according to consulting firm McKinsey & Co. These numbers explain why there is a lot of innovation in online space. The untapped online users and the urge of Indian users to shop online makes this industry attractive in the coming years. Interestingly Flipkart has never seen profits and is yet to break even. The same goes with other e-commerce companies as well.
Can we call this innovation?
Flipkart and other companies says they are innovating and finding attractive ways to benefit the customers so that we get the maximum value out of the online shopping. Amazon, the most customer centric company in the world, has introduced same day delivery way back in 2009 in USA. They have added their own logistics services to the range of services offered. This will make sure that the package reach the customer on time and not depending on third-party logistics operators. Flipkart might start their own logistics services soon. The implementation of warehouses all over India and their own logistics service will give the much-needed advantage to Flipkart and they can reach the rural India and remote areas much easily than other players.
Amazon has started a pilot project to try local kirana stores as their shipment pick up points. They have partnered with many kirana stores to act as their pick up points there by giving advantage and visibility to those stores as well. The customers can get the shipment from these stores where the amazon delivery is not available. It’s a win win situation for both amazon and kirana stores. They are getting more visibility from customers who might not visit their shops otherwise.
Amazon has also partnered with India post to deliver the orders in far off places where amazon delivery service is not available. Amazon is trying out partnership with Bharat petroleum corporation as well. Both these projects are being tried out at some parts of India. Based on the success of the project, they might choose which delivery model to stick on.
There are high chances that Flipkart might introduce membership services like Amazon Prime. Already most of the Indian e-commerce companies are having membership services offered. Amazon Prime is a premium membership service through which customers receive benefits like free two-day shipping, unlimited access to stream TV shows and movies in prime instant video and ability to lend books from kindle owners lending library for a fee of $99 per year.
The advantage of online stores is that the customers can shop within their comfort. Every e-commerce player is taking steps to shorten the waiting time between order and delivery. The innovation like Amazon prime air might be a revolution in this industry.
Most of the Indian consumers are price conscious but at the same we are lazy and calculative too! Rather than going to a physical shop and purchase we might actually purchase from an online store if they can deliver it on the same day. Paying Rs.200 makes sense because if you need to go to a physical store to purchase your monthly grocery and stationary, you might need to shed some fuel price plus a dine out and a movie. You might actually need to spend Rs.200 on shipping charges and not spending several hundreds on a shopping especially if you are going with your wife 🙂
But of course the model won’t work if you are planning to make small purchases.
The future of e-commerce is unpredictable. We need offers customized for Indian consumers and not copying proven models from US. The customers are entirely different in both the countries. But lets hope that the ultimate winner is the consumer who pays the bill! We might not be far away from a day when actually drones visits your home to deliver your product ordered online. We might even see Flipkart and myntra delivery vans in front of our homes shortly.
What do you think of same day delivery. Do you think whether this service works out? Will you use this service and if yes, which all products do you plan to purchase through this service? Please post your answers as comments. I would appreciate your response and looking forward to some interesting insights.