Delhivery doubles down on D2C sector with same-day delivery service

Logistics start-up Delhivery has launched a same-day delivery service for businesses and manufacturers in the direct-to-consumer (D2C) space as it looks to strengthen its presence in the e-commerce fulfilment service space. The same-day delivery service is currently live in 15 key cities, which will enable D2C brands to deliver their online orders on the day the order is received. The new service will allow D2C brands to improve consumer experience and brand loyalty.

Apart from this Delhivery claims that faster shipping would reduce the return rates, improving the brands’ margins. Delhivery’s expedited shipping service also allows D2C brands to skip e-commerce marektplaces and ship products directly from their store or warehouse. This, coupled with the faster shipping policy, would mean that brands would have a chance to increase their revenue margins by skipping commissions paid to e-commerce marketplaces.

Delhivery will partner with brands and identify fast-moving stock-keeping units (SKUs), which will be stocked in warehouses within the city, close to the end consumer. When a consumer places an order on the brand’s online store, Delhivery’s back-end will show the fast-moving SKUs available for the guaranteed same-day delivery. After the order is placed, Delhivery’s back-end will allocate the consumers’ orders to the nearest in-city warehouse.

Orders received as late as 3 pm will be delivered on the same day. “We consistently innovate with technology-led solutions. This solution will enable D2C brands to leverage our technology and supply chain capabilities to meet the evolving needs of their consumers,” Ajith Pai, chief operations officer, Delhivery, said in a statement.

According to a recent brokerage report by investment banking firm Credit Suisse, India’s express parcel delivery market saw about two billion shipments in FY21 and is growing at a 30% CAGR. Around 60% of the market is served by the captive logistics arms of two large online platforms and the rest of the market is mostly served by three players. However, the investment bank predicts a gradual reduction in the share of the two dominant platforms (Amazon and Flipkart) since several diversified players in e-commerce such as conglomerates, social commerce, online-offline merchants, social commerce and D2C brands taking centre stage in the market.

Hence, focusing on these segments would be a huge competitive differentiator for Delhivery. “Delhivery may have a clearer route to profitability, as competitive intensity is stable with a clear visibility of improvement in the express parcel delivery sector. There are no new players in express parcel delivery and the industry is consolidating amongst three players.

Delhivery may actually be a beneficiary of competition between e-commerce platforms driving increased customer usage,” Credit Suisse said in the May 2022 report. With its 120+ gateways, 20+ automated sort centres, 80+ fulfilment centres and 2,200 direct delivery centres, the company has covered 90% of the country, operating over 15 million sq ft of leased infrastructure at a pan-India level. It provides supply chain solutions to a diverse base of 21,342 active customers, such as e-commerce marketplaces, D2C e-tailers, and enterprises and SMEs across verticals like FMCG, consumer durables, liftstyle, retail, automotive and manufacturing.

Delhivery, which recently went public in the stock markets was subscribed around 1. 63 times on the final day of subscription. According to NSE data, the offer received bids for 10,17,04,080 shares against 6,25,41,023 shares on offer.

When it made its debut on the stock markets on May 24, the stock was listed at a 1. 7% premium at Rs 493 per share. At listing, Delhivery market capitalisation stood at Rs 35,718.

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