Seattle-based e-commerce major Amazon delivered a parcel to pin code 790002 in India recently, and sees it as an achievement of sort. It may look like any other six-digit address code, except that the destination was a remote place called Balemu in West Kameng district of Arunachal Pradesh.
New Delhi-headquartered Snapdeal gets 70 per cent of its orders from towns, which are not in the top 10 list of cities in India. Flipkart aims to offer a seamless last-mile delivery experience to every customer across geographies.
It's not a coincidence that international and domestic e-commerce companies, mostly funded by marquee foreign investors, are relying on India Post, the government-operated postal system, to access the remotest part of the country.
For India Post, the sudden growth in Indian e-commerce space has come as a lifeline. Not restricting itself to the big players alone, India Post has tied up with some of the niche online players too such as Shopclues, Naaptol and Yepme.
The revenue India Post got from delivering parcels of e-commerce companies through the country in 2013-14 was a meagre Rs 20 crore out of its total revenue of Rs 10,750 crore. However, an official at the Department of Posts told the Business Standard that the expectation from now on is much higher. Tapping the internet companies' thirst to sell their products, ranging from electronic goods to apparel, to the furthest corner of India, India Post is aiming for Rs 100 crore of revenue in the current financial year, and more than double to over Rs 200 crore by 2015-16 from e-commerce alone. It's the target for five years from e-commerce is much higher, at Rs 5,000 crore.
In fact, India Post is exploring a separate entity under the department of posts in the next couple of years for e-commerce. "We are seeing a decline in documents delivery, and there is a huge untapped demand in e-commerce,'' the official said.
India Post plans to invest Rs 300 crore in upgrading and setting up new automatic parcel centres (APC) to meet the delivery requirements from e-commerce firms.
It has two automatic parcel centres in Delhi and Kolkata. And the new ones will be coming up in Mumbai, Chennai, Hyderabad and Bengaluru. The delivery channel of India Post is being utilised primarily for small towns and cities - tier II and III. It has a network of 1.5 lakh post offices with an employee base of around 5.5 lakh.
Samuel Thomas, director, Transportation, Amazon India, said India Post was one of the ''prime carriers that Amazon India uses as a delivery channel''. Ámazon services over 19,000 pin codes through 140,000 post offices across all 35 states and Union Territories in India. There are a total of around 26,000 pin codes in India. "We were the first e-commerce player to pilot deliveries with India Post for cash on delivery back in 2013, just a few months after we had launched Amazon.in in India,'' the executive pointed out.
Snapdeal co-founder and COO Rohit Bansal said the company's core objective is to "democratise buying and selling", and the collaboration with India Post is serving that purpose. From 70 per cent orders coming from tier-II and tier-III towns now, Snapdeal is clearly aiming for more from that segment. Flipkart too is talking about customer deliveries and returns to/from thousands of pin codes across India.
"Our association with India Post has helped us enable Indians from the most remote part of the country to shop online. Given the vast network support of India Post, this association makes it easier for us to reach out to urban and rural India alike,'' said Neeraj Aggarwal, senior director, Supply Chain, Flipkart.
However, as of now, data from department of posts shows maximum number of bookings (in terms of value of the order) is coming from Delhi. Next in the pecking order are Maharashtra, Andhra Pradesh and Tamil Nadu.