Home / Companies / Start-ups /  E-commerce, hyperlocal supply chains to get cheaper with EV adoption

BENGALURU : The electric vehicle (EV) revolution isn't just mushrooming from consumer demand but also from e-commerce and hyperlocal delivery firms. Delivery and e-commerce startups such as Bigbasket, Swiggy and Flipkart are also adding to the overall demand for EVs, especially with the two-wheeler format.

EV scooter makers including eBikeGo, Okinawa and Ather Energy are helping e-commerce and food delivery firms to convert their petrol-based scooters, used for deliveries, to more cost-efficient EV variants.

Bigbasket, which employs its own delivery workers on a full-time basis unlike Swiggy and Zomato, said that they are able to pay out 30-40% more salaries when the delivery workers chooses to use EVs for last-mile deliveries. This is possible since delivery workers are now able to save up on the fuel cost. Bigbasket is also taking a step forward by setting up its own charging station infrastructure across its dark stores, which are small warehouses spread across cities it operates in, as well as across its fulfilment centres.

A move that may benefit delivery workers, Bigbasket and Flipkart are also slowly converting their bigger-sized procurement trucks into EV-powered vehicles, which are expected to drastically bring down supply chain costs for e-commerce firms.

Bigbsaket has currently deployed over 4,000 EV scooters in Bengaluru, and plans to double the count by next year. While, Flipkart is also aiming to transition to a 100% EV model for its logistics operations by 2030, and for that the e-commerce company is aiming to install charging infrastructure across 1,400 supply chain premises in its network.

“EVs are quite economical for a typical delivery person who makes anywhere from 13,000 to 18,000 per month doing 400 to 500 deliveries a month. We also charge 50 to 65 rupees per order, a part of which goes to the delivery personnel," KB Nagaraju, Chief Customer Experience Officer, Bigbasket said in an interview.

However, out of the 13,000 to 18,000 in net monthly earnings, delivery personnel incur a fixed fuel cost of anywhere between 5,000 to 6,000 since they cover almost 60-70 kms a day.

“With electric vehicles, the same delivery person is able to save this fuel cost, and effectively his net income will increase by at least 30%-40% per month," Nagaraju added.

With more net income being paid to delivery workers, Bigbasket is also able to bring down delivery costs from the earlier 50-65 per order to around 40-45 per order in areas where it has an EV deployment in the last-mile.

According to industry estimates, there are more than 2 crore two-wheelers running in India, and a good chunk of these the two wheelers are being utilized in the food delivery, e-commerce, and all last-mile logistics services in the country. And most of these vehicles are petrol-based scooters. EV manufacturers such as EbikeGo, Okinawa, and Ather Energy are looking to convert this fleet into EV scooters.

Delhi-based EV manufacturer eBikeGo, currently supplies EV scooters to delivery startups such as Bigbasket, Zomato, and to retail brands including Burger King, Nandos, among others. The company recently launched a franchise models targeting to help delivery-centric brands and startups. Its franchise owned and company operated (FOCO) model requires companies to invest anywhere from 20lacs to INR 1crore for purchasing EVs without having to expose the asset ownership on the balance sheet.

eBikeGO’s founder and chief executive T Irfan said that the startup has already deployed more than 1,600 EV scooters in the franchise format and had clocked gross revenue of 2 crore in 2019-2020. Irfran added that the EV startup is now targeting to achieve 10 crore in gross revenue by end of 2021.

Jeetender Sharma, managing director, and founder of Okinawa said the total addressable market size for EVs currently stands at around 3-5 million users. Sharma also estimated that around 100,000 bikes out of this can be deployed in hyper local delivery and e-commerce brands over the next one year.

“There is a huge opportunity for EV Industry in e-commerce and hyperlocal delivery market. In the post COVID era, e commerce is going to play a major role in the EV industry…We are in process of building presence in e-commerce and hyperlocal market currently," added Sharma during a phone interview.

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