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Business News/ Companies / News/  Amazon tops the charts in online delivery experience

Amazon tops the charts in online delivery experience

Parameters like fast returns and reverse logistics help e-com firm score high marks

FILE PHOTO: Amazon is also offering No-cost EMI options (REUTERS)Premium
FILE PHOTO: Amazon is also offering No-cost EMI options (REUTERS)

Amazon India beat Flipkart on parameters such as delivery speed and consumer experience, according to a study. Amazon India had the best positive customer sentiment among all online marketplaces, including Flipkart, Snapdeal and Paytm Mall, with its premium delivery service Prime and same-day deliveries being preferred by users, according to the Redseer Shadowfax Logistics Index (RSLI), jointly developed by Redseer and logistics startup Shadowfax.

Although Amazon was the most preferred, Flipkart continued to clock the highest growth in terms of shipments in the September quarter, as deliveries picked up in tier-2 cities owing to higher demand from these geographies.

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Amazon continued to ramp up its delivery strength by opening 10 new fulfilment centres in July and adding nearly 200 delivery stations before the festive sales.

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Redseer said consumer sentiment towards Amazon was high due to parameters like fast returns and reverse logistics, as well as its ability to manage cost per delivery with speed. Amazon India’s average delivery time per order was close to 3.5 days with return pickups in 2 days versus the industry average of 4-5 days of delivery time, said Redseer.

“The larger macro trend in logistics is around the speed of deliveries, on which consumer happiness hinges. Hence, we are seeing e-commerce and logistics players investing significantly on ramping up regional warehousing. Another trend is around managing customers during deliveries, which includes slot-based deliveries," said Abhishek Bansal, co-founder and chief executive of Shadowfax.

He said increasing consumer expectations has led to further innovation in the logistics landscape such as the introduction of delivery slots. In e-grocery, BigBasket allowed customers to return certain items instead of the entire order. In electronics, the delivery staff is increasingly being trained to do quality checks during returns, and in the apparel segment, logistics staff is allowing customers to try and return the orders immediately in case of any issues.

Currently, Amazon India and Flipkart, and food delivery firms such as Zomato and Swiggy account for almost 75% of total online shipment volumes. In Q2, Amazon and Flipkart together made close to 400 million logistics shipments, Redseer data showed.

“The online delivery ecosystem is increasingly capitalizing on crowdsourcing delivery fleets from third-party logistics firms, instead of developing in-house logistics capabilities. This is also owing to sectors like direct-to-consumer brands taking on an online strategy, resulting in 90% of quarterly shipment growth in this category," said Ujjwal Chaudhry, associate partner, Redseer.

Through the ‘Redseer Shadowfax Logistics Index’, close to 40 brands across horizontal, vertical, omnichannel, direct to consumer, hyperlocal, and online B2B platforms were evaluated on parameters of growth, speed of delivery, customer and merchant experience achieved, last quarter.

Zomato, Reliance Retail-backed Ajio and BigBasket were leaders in terms of overall logistics consumer experience across categories of hyperlocal, vertical-led commerce and e-grocery segments, the Redseer-Shadowfax report stated.

In the vertical category, Myntra had the strongest quarter growth in shipments and Nykaa outperformed in consumer preference, while Ajio took the lead for its fastest delivery and above average consumer experience.

In hyperlocal foodtech, while Zomato took the lead in shipment growth, customers continued to prefer Swiggy in terms of delivery experience.

Redseer said that the e-commerce market in India is estimated to grow at more than 40% compound annual growth for next 5 years, with gross merchandise value of online shipments growing from $32 billion in FY’ 20 to $180 billion in FY’25. While total total shipment outsourced to third party logistics partners will grow from 0.7 billion in FY’20 to 3.1 billion in 2025.

This shows that the share of in-house logistic players such as Flipkart-owned Ekart is as high as 85%.

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Updated: 10 Dec 2020, 07:56 AM IST
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