In the fiscal year 2021, the country’s biggest and fastest fully integrated player in terms of revenue, Delhivery realised that the logistics industry in India held a vast potential back in the year 2011, the year company was established. Let us find out how Delhivery managed to become one of the leading players in the logistics industry amidst other competitors like Bluedart and others. More about the company and its business model is in the write-up.
Delhivery Founders and Their Growth Story
While conceiving the idea of starting a company in the logistics arena, two of the co-founders earlier used to work with Bain & Company as consultants. However, the two thought of starting something on their own. On experimenting, they found there were huge lacunae in the logistic industry.
In the beginning, Delhivery started helping restaurants deliver packets to the consumers. Swiggy was still not around, and Zomato was only a listing site restaurant. But they realised that there was a better opportunity in the eCommerce market.
The Delhivery owner, a new-age startup equipped with a tech-focused approach, could understand that they have the edge over other players. It partnered with other eCommerce players, co-developing the products with the prospective customer base.
The first area was delivery times were very long, there was no real-time visibility, and the third was a longer cash delivery cycle. The logistics solutions take up to 30 days to return payments collected from the consumers to the eCommerce companies. Still, Delhivery solved these problems, and the cash delivery cycle was brought down to 5 days.
Delhivery Business Model
The company focuses on extending a full range of logistics services, from express parcel and heavy goods to truckload freight, Delhivery warehouse solutions, cross-border logistics, e-commerce solutions, and supply chain.
The five business verticals of the company include-
- Express Parcel
- Part Truck Load Services
- Truck Load Service
- Supply Chain Services
- Cross Border Services
The company boasts of 15 million square feet of infrastructure that has been leased.
Delhivery operates an asset-light business model, letting it scale up sooner without higher fixed costs. It leases out vehicles and infrastructure related to logistics while at the same time entering into collaboration with the network partners for their logistics services.
Key Takeaways
The express parcel service forms the largest revenue source for the company, being 83% in 2019 to 70% in 2021. Delhivery adheres to the SEC or Securities and Exchange Boards’ ICDR regulatory norms of not allocating greater than 25% of the raised funds to general corporate purposes.
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