FROM MAGAZINE: Interview with Amit Sawhney the CEO of Smartbox: Smartbox makes smart move
E-commerce in India has seen an unprecedented growth in the recent years. While the online shopping portals make shopping easy and time saving, the current logistics system isn’t equipped to cope and deliver flawlessly, given the unreliable schedules of the shoppers. A Delhi-based startup spotted the pitfall and engineered the perfect solution to tackle the last mile delivery challenges. ‘Smartbox’ has introduced India’s first network of automated parcel delivery terminals for online shoppers. These terminals will facilitate 24*7 availability of a physical address for online shoppers to collect their parcels as per the time and location of their convenience. These shoppers can choose a Smartbox terminal near their office or home as delivery option. When the parcel arrives, consumers will receive an OTP that can be used at the terminal to pick-up parcels at a time convenient to them. Smartbox also offers an option for cashless COD, to be precise ‘Card Swipe on Delivery’ (CSOD).
For e-commerce companies this will reduce high costs and challenges associated with the last mile delivery of parcels. Launched in January this year, Smartbox has already placed 12 terminals which have been installed at primary metro stations and business centers in the Delhi NCR region. In an exclusive interview to Shreya Bhattacharya, Amit Sawhney the CEO of Smartbox, shared his vision.
You have introduced automated parcel delivery terminals to deal with last mile delivery challenges of e-commerce companies. How are you going to ensure the safety of these terminals from anti-social elements, especially when you expand your network?
Every transaction being made whether the courier dropping or the customer picking up, is recorded and pictures are taken at the time of the transaction. Everything is under 24×7 CCTV surveillance. These terminals are un-manned but at the same time they are located at semi-secured location. When I say semi-secured location it means, the facility is installed at a place which is already manned and secured like in a residential complex, installing them next to a security guard’s home, in an office complex, in IT parks or in common areas. We are also installing it at metro stations.
What is the capacity of these automated terminals? A challenge remains the size of parcels.
95 percent of products shopped online are typically electronics, fashion, shoes or anything up to a microwave size. Till that size we can handle on our machine. What we can’t handle are white goods like TV, refrigerator and furniture. These terminals are completely modular. If a site gets fewer parcels we can put few compartments in that terminal. If a site gets lots of parcels, like in an IT park, we can install large number of compartments per terminal. Within the compartment, there are different sizes like extra small size, small, medium or large sizes. So, it is based on the need of the market.
What is the scope of reverse logistics in this concept?
In case someone has to return a parcel, today they call the call centre of an e-commerce company. They schedule a pick up over the next three days. At a particular time the courier person comes and takes back the goods. In future, the e-commerce companies can issue an OTP and the customer can walk to the nearest terminal and drop it off and the transaction would be closed.
Have you also considered offering your services for perishable items?.
At a later date, we will offer terminals for perishable items. At other places, temperature controlled parcel lockers have started to become a reality. May be in India that will also become a reality through us. But right now we are very new, very young. So we are taking one step at a time.
What is the revenue model of Smartbox?
We have multiple revenue models. Revenue streams we will build up, but the primary stream as of now is- we bring efficiency to the e-commerce companies or their logistics partners, so the gain that we bring to them is shared by us. Last mile delivery is the most complex and costliest part of the delivery process. 50 percent of the cost is tied in the last mile delivery. But we increase the efficiency of the delivery agent because of which the cost goes down for the e-commerce companies. In India, on an average, one delivery boy does 25 deliveries by making 30-35 attempts in a day. So the cost for parcel is arrived by the salaries and the travel expenses of the delivery agent divided by the number of parcels that got delivered. Now the same delivery agent will be delivering 250-300 parcels in the future, once volume builds up for Smartbox. So there is 10 to 12-fold increase in efficiency of the same delivery agent. So the company’s gain is shared by us and it’s a free of charge service for the consumer.
You currently operate only within Delhi NCR. What are your future expansion plans?
Right now we are focusing on Delhi NCR, in phase 2 we will go to Mumbai, Bangalore and in the phase 3 we will cover the balance 5 tier ones of the country. So in the next two years, we will be present in top 8 metros of the country. In the long run we will be going to tier-2, tier-3 as well.
How much have you gained in terms of business since the inception of Smartbox?
We are still in the process of signing up clients, integrating our network. Because there is a bit of tech work involved in there. We have secured 4-5 clients and dozens are on their way. We have tied up with companies like Oriflame, Shopclues and dozen more are in the pipeline.