Cashing in on India’s traditional time of revival and optimism – the festival season – Smart Express launches its commercial operations in October. Aiming to redefine express logistics market in India, Smart Express is fully geared to scale up too – from 30 centers across India in the first month to 300 in a couple of years. In an exclusive interview with Yogesh Dhingra, Managing Director and CEO, Sarada Vishnubhatla finds out about the company’s unique success strategy which is dedicated to remove customer pain points.
Smart Express launches its commercial operations in the express logistics market in October making the most of the festival season. The reason being that India simply transforms during festival time and historically, businesses take on an upward trend during this time. Managing Director and CEO of Smart Express, Yogesh Dhingra has been burning the midnight oil in the last 3 months along with the co-founders to launch Smart Express with an aim to redefine express logistics market in India.
Smart Express has received a seed funding of Rs. 100 crores from IIFL PE Fund, and Smiti Holding & Trading Company which is owned by Jalaj Dani Family Office. The investment, which will flow in 2 tranches in the next 2 years, will be linked to pre-defined business milestones pertaining to expansion and scale of business.
Yogesh Dhingra shares: “Market sentiment is surely reviving. The COVID pandemic seems to have accelerated the growth of logistics and e-commerce industry, with people preferring home deliveries and this trend may continue in the next year even if normalcy. E-commerce may continue at 45% growth rate for at least next 5 years. With 5G connectivity rollout in the offing, e-commerce will only grow further.”
Helping Online Business Grow
India’s online business stands at less than 6% of the total GDP when compared to 20% in developed economies, while UK and US hover around 13-14%.
But Yogesh has high hopes for India: “Smart Express fits right in the scenario because we believe in offering quality at low logistics cost. Smart Express will show that quality does not equate high cost. Our strategy is to try and keep majority of our cost variable. And that is possible when the customers are given a choice in terms of time taken to deliver goods and the mode of transport.”
Rising Above Competition
Smart Express is aware of the fierce competition in the form of traditional players with personal touch and new companies using technology. But Yogesh feels that scope for improvement always exists.
He explains: “Smart Express embraces the positives that exist in the market while bridging areas of improvement in the industry. Though most players may be armed with deep pockets, our point of differentiation will be our prudence in how the business will be conducted. We are here for the long haul, and we are a 500-strong team with vast experience in this industry.”
Smart Express believes in transparent and ethical work practices. And the founders believe that talented people delivering quality performance will be the key to success.
Yogesh adds: “We want to share wealth creation opportunity with our team. No other company in the industry can match us in offering Employee Stock Ownership Plan to 125 of our managers because we value their expertise. We also acknowledge the tough jobs that the delivery and pick-up boys in our industry execute. Smart Express will be the first of its kind in India to give them variable pay.”
Scaling Up
Smart Express plans to open 300 centers pan nation in the next 3 years. The company is well-prepared to offer its services in B2B, B2C, D2C, C2C and hyper-local delivery segments.
Yogesh explains further: “Our strategy in the next couple of years is to penetrate deeper into the country which is B2C e-commerce deliveries and then add those zip codes. We also plan to have our own dedicated pick-up and delivery units while the rest of the country will be serviced through our alliance partners.”
With tier-2 and 3 cities showing tremendous interest in e-commerce deliveries – as was witnessed during the pandemic and the following lockdown times, Smart Express is keen to cash in on the relatively untouched market with a proposition of its own.
He shares: “In India roughly half the e-commerce deliveries are paid on delivery. Recognizing this, we will be offering a range of payment methods to serve all kinds of consignees. Express logistics segment constitutes roughly 20% share of the entire transportation market in India and D2C is a fast-growing segment now. We are offering unique service in air express category, and we will provide with AM/PM deliveries based on the customer requirement. For others, we will offer packages with 48/72/96-hour deliveries.”
Smart Express will primarily focus on institutional clients through its range of products such as AirLite Express, AirSecure Express, AirPackage Express Premium, AirPackage Express Economy, Ground Package Express Saver, E-Tail Express Forward, E-Tail Express Reverse. Smart Express will ship medical and electronic gadgets, laptops, mobile phones, small but valuable packages and apparel.
Tackling Challenges
Smart Express is prepared to face challenges, namely, retaining talent, maintaining quality of service at all times, and the need for constant innovation.
He elaborates: “Experienced personnel are valued everywhere and we plan to nurture our human capital while adding more executives. We are determined to maintain our service quality by employing technology, automation and scaling operations wherever needed. Innovation is a constant for us because we value thinking out of the box.”
Another crucial aspect of logistics which needs proper handling is the first, mid and last miles.
Yogesh clarifies: “Getting the first mile right is critical and that is why we will be owning it. Mid mile is dependent on 3rd party logistics. Most commercial airlines today are punctual and road transportation has improved tremendously in India. Lastly, we will own roughly 80% of the last mile, while the rest will be serviced by our alliance partners. Since we will be holding the proverbial key – meaning the first and the last mile – we are confident of our efficiency, reliability and performance.”
Smart Express is in the final stages of tying up with a US-based logistics service company. The software has been customized to suit Indian customer needs to take into account variable costs, and cash on delivery payment method among others.
He says: “With the state-of-the-art global technology on board, we will be able to provide 360-degree visibility, faster transit time, end-to-end track and trace. The technology will also help us in addressing not only our operational needs but we can help our customers too.”
India’s logistics cost is among the highest in the world at 13-14% of the GDP. Though change seems to be on the horizon what with the policy makers seeking National Logistics Policy in a bid to increase competitiveness. India may just be looking at lowering, if not halving, the logistics cost in the next few years.
For Smart Express, customer fidelity and understanding their pain points hold the key to success. Naturally, the company comes armed with transparency and data. Under the able guidance of Yogesh Dhingra and co-founders, Smart Express is poised to bring ease of business to customers and in the process, aims to successfully re-invent express logistics sector in India.