3 min read.Updated: 10 Jun 2016, 07:45 AM ISTAshna Ambre
E-commerce companies like Flipkart, Snapdeal and Amazon are looking for avenues to increase the proportion of cashless transactions and reduce operational costs from cash-on-delivery payments
Mumbai: The next time a user orders something from a e-commerce company and isn’t at home to pay cash, or is out on a holiday, the order won’t go back. It will still be delivered. Smartbox E-commerce Solutions Pvt. Ltd, a New-Delhi based start-up, launched in January this year by Amit and Vineet Sawhney, will make it easier to receive e-commerce orders.
Currently, a single delivery takes more than one attempts to be fulfilled and there is a 40% extra cost for the e-commerce company for the additional attempt for delivery. E-commerce companies like Flipkart, Snapdeal and Amazon are looking for avenues to increase the proportion of cashless transactions and reduce operational costs from cash-on-delivery payments, Snapdeal’s acquisition of FreeCharge for $400 million in March 2015 and Amazon acquiring Emvantage Payments Pvt. Ltd for an undisclosed amount in February vindicates this.
“A lot of orders are delivered when users are not at home and the parcel is then taken back. A few housing societies have stringent security rules. Some corporates have fixed timings for delivery in premises and in some cases deliveries are not permitted in the corporate parks," said Amit Sawhney.
The problem persists not just for deliveries but for order returns too. Currently, the user will have to put in a special request, wait for someone to come collect the order which is a cumbersome and time-consuming process," said Sawhney. The company plans on making this process seamless.
The concept of lockers is widely used outside India. In European Union and the US, Amazon has its own lockers from where users can pick up their deliveries. India is catching up to the trend. Amazon is looking to partner with Smartbox for similar services in India. The company is on advanced stages of finalising the partnership. By the use of smartboxes, a delivery boy can make up to 300 deliveries rather than 30 each day.
According to a EY survey in 2016 as much as 60% of all e-commerce transactions in India are still paid for in cash, which is way higher than 40% in China, 28% in Indonesia and 24% in Brazil.
How it works
Smartbox has set up residential colonies and corporate parks with a 52 compartment installation. When a customer places an order, it can click on the Smartbox delivery of payment ( just like COD or internet banking, available only for a select few locations currently). The order is then taken to the smartbox which is closest to the user’s address and when it is delivered the user is notified.
“The user will receive a OTP, in case of a prepaid order the locker will open as soon as the OTP is punched in. In other cases, the installation as a CSOD (card swipe on delivery) option for payment," said Sawhney.
In case of return of the order (a feature that will be launched after sometime), the user can put in a request, receive a OTP and then put the parcel back into the locker. Currently, a few deliveries are done by Smartbox, however going forward it will outsource all deliveries.
E-commerce companies pay Smartbox 40-70 per order.
Each of these installations that are 400m X 600m X 350m in dimension costs 4 lakh. The company has set up 125 of these in Delhi NCR region and wants to set up lockers across 1,000 location in eight cities in 2016.
It is looking to raise $10 million in the next three months to fund its expansion plans. As an extension to its services, it is looking to provide general courier services for documents and small parcels.