June 17, 2024
Business

Delhivery Business Model

The organisation is committed to provide a comprehensive array of logistics services, including express parcel, heavy products, truckload freight, Delhivery warehouse solutions, cross-border logistics, e-commerce solutions, and supply chain management.

The 5 sectors

The company’s five business sectors are as follows:

  • Express Parcel
  • Part Truck Load Services
  • Truck Load Service
  • Supply Chain Services
  • Cross Border Services. 

The corporation states that it has leased 15 million square feet of infrastructure.

Delhivery uses a low-asset business strategy that enables it to scale up more quickly without incurring greater fixed expenditures. It collaborates with the network partners for their logistics services while leasing out logistics-related equipment and infrastructure.

How Did Delhivery Begin?

This unicorn’s origin story is an intriguing one. Sahil Barua and Suraj Saharan ordered dinner from a nearby restaurant late at night and struck up a conversation with the delivery boy. They finally arrived at the eatery proper, where they spoke with the proprietor. They took on the responsibility of recruiting every employee on hand when they learned that the restaurant would be closing. As a result, Delhivery was able to launch its operations.

The startup first focused on trying to address the issue of restaurants’ meal delivery problems in under an hour. They did this mostly because they recognised the demand for a restaurant delivery network. With hyperlocal, they got started in this manner.

The first thing Sahil and Suraj did was finish the restaurant delivery orders in a half-hour. Later, Mohit Tandon, Bhavesh Manglani, and Kapil Bharati joined them.

One of their investors actually persuaded them to begin operating in the e-commerce industry while their firm was flourishing. They came to the realisation that because they are already capable of delivering food, why not look at the e-commerce industry and deliver goods as well.

They recognised a difference between traditional delivery and e-commerce delivery one that their rivals were unable to, and realised the size of the e-commerce delivery market. On this basis, they transitioned from the hyperlocal to the e-commerce market.

Delhivery’s business strategy

The logistics industry, which formed the foundation of the early 2010s e-commerce revolution in India, or even the more recent D2C (direct to consumer) growth, is rarely mentioned. The fact that backend activities are frequently less noticeable and that logistics is generally regarded as a dull industry are two factors that contribute to this. However, the $200 billion estimate for this uninteresting Indian logistics sector for 2021 was based on projections for exponential growth.

In 2011, the year the firm was started, Delhivery, India’s largest and fastest-growing fully integrated player by revenue in Fiscal 2021, saw the enormous potential of the country’s logistics sector. In this article, I’ll describe Delhivery’s rise to prominence as India’s top logistics provider despite the presence of established players like Bluedart, describe the company’s business model, and conclude by giving interesting details regarding its impending initial public offering (IPO).

The Founders of Delhivery and Their Growth Story

Two of the co-founders had previously served as consultants for Bain & Company when the concept for creating a business in the logistics industry first emerged. But the two considered launching something on their own. After some testing, they discovered the logistical sector had enormous gaps.

Delhivery initially began assisting restaurants with the consumer delivery of packets. Zomato was merely a restaurant listing website, while Swiggy was yet unavailable. However, they came to see that the eCommerce sector offered a bigger chance.

The proprietor of Delhivery, a modern company with a tech-focused strategy, could see that they have an advantage over rivals. It collaborated with other eCommerce companies, co-creating the items with the target market.

The first problem was the length of the delivery times, the second was the lack of real-time visibility, and the third was the length of the cash delivery cycle. The recovery of consumer money to eCommerce enterprises through logistics solutions can take up to 30 days. The cash delivery cycle was shortened to 5 days thanks to Delhivery’s solutions to these issues.

Delhivery’s funding and development

  • Three of Delhivery’s co-founders were employed by Bain & Company as consultants before founding their own business. They made the decision to take a break after three years at their employment and try their hand at becoming their own boss.
  • The logistics sector stood out the most when deciding what to work on. Sahil Barua and Suraj Saharan, two of the co-founders who lived across the street from one another and had a logistics company in between them, carried out a lighthearted experiment by sending books to one another. The logistics provider told them that although it would charge Rs 250, the product will still be delivered the following day. The founders discovered that there was much room for development after giving the logistics sector a closer look.
  • Delhivery originally began as a hyperlocal delivery service that aided restaurants in sending goods to consumers. Back then, Swiggy hadn’t yet been created, and Zomato was only a restaurant listing website. However, they quickly realised that there was an even greater possibility in package delivery for e-commerce businesses and changed their focus to meet their needs.
  • The decision to help ecommerce businesses deliver their products to clients turned out to be a brilliant move. Consumer expectations changed as the ecommerce revolution started to take hold in India; they now anticipated the delivery to reach them as soon as feasible.
  • The e-commerce boom produced a logistical demand that the existing logistics players had not foreseen, thus they had not modernised to accommodate these new businesses. A modern company called Delhivery spotted the ideal chance to upend established businesses and adopted a tech-focused strategy. In collaboration with the major online retailers, it developed the product alongside potential customers based on their input.

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Supurna Sinha

Supurna Sinha has been a content writer for three years. Supurna Sinha has provided her services independently and through the online employment forums. Her articles focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.