‘We are looking at servicing a total of 3 crore customers with support from close to 15 lakh driver partners'
Over the weekend, Lakshmi Ajay, ITLN virtually caught up with founders Pranav Goel, CEO, and Uttam Digga, COO of logistics marketplace Porter about their recent funding round, the journey of the company, the tech component galvanizing the logistics landscape, and future plans as we step into a new year.
January 3, 2022: Over the weekend, Lakshmi Ajay, ITLN virtually caught up with founders Pranav Goel, CEO, and Uttam Digga, COO of logistics marketplace Porter about their recent funding round, the journey of the company, the tech component galvanizing the logistics landscape, and future plans as we step into a new year.
1. What is the current market size of India's intra-city logistics sector and what is your market share in the same?
Pranav - The intra-city logistics market in India is worth billions of dollars whereas the Light Commercial Vehicles segment alone stands at $32 billion. With companies investing in areas such as two-wheelers, the market size is said to grow tenfold. Taking into account the country’s top 50 cities, Porter’s addressable market excluding the two-wheeler segment stands at $18 billion.
2. How many cities in India are you currently present in and how many do you plan to expand to? What are some numbers Porter has hit since its inception in 2014?
Pranav - Porter has gained a strong foothold in 15 cities across India, becoming an intra city logistics powerhouse among these regions. With new business developments and technology, we are set to expand our presence to 35-40 cities by March 2023. Porter has presently partnered with 3 lakh driver-owners and serviced more than 60 lakh customers across the markets we operate in. With the recent capital infusion of Rs 750 crores, we plan to increase this number to five times by March 2024.
3. How does the company aim to leverage the recent Series E capital infusion to consolidate its position and future-proof its systems? What is your current company size and what kind of talent are you looking to acquire or add given your current expansion plans to enter the top 35 cities by 2023?
Pranav -We are primarily looking at 4 levers to concentrate our efforts on in order to achieve our short- and medium-term goals with the capital infusion from the Series E funding round. Our first lever would be geographic expansion within India to cater to and service customers in a multitude of cities apart from the 15 cities that we already operate in. Our second lever would be to expand our categories and offerings to service a wider user base. We are exploring categories such as multiple commercial vehicle options, rental and outstation services, packers and movers, and the like. Our third lever would be expanding our user base by creating newer use cases for enterprise customers and individual customers alike. Our final lever for growth through capital infusion is investments in creating an allied support ecosystem to the logistics space. Our vision for this offering would be to create a non-logistics ecosystem aiding in the seamless functioning of the logistics sector. Strategically for these 4 levers to be executed effortlessly, stellar talent from multiple fields including but not limited to technology, engineering, product, marketing, and strategy is required. However, currently, our focus is to provide our customers and driver-partners a product that is automated wherever possible and with the highest quality while also being economically viable for both parties.
4. You are planning to foray into 35 Indian cities. What growth figures are you hoping to touch in the next two years?
Pranav -Ideally, we are looking at a growth volume five times of our current number, in terms of the customers we serve and the driver-partners we associate with, by March 2024. With a strategic vision, we are aggressively entering new geographies to ensure that we meet this target. If realized we are looking at servicing a total of 3 crore customers with support from close to 15 lakh driver-partners.
Pranav Goel, CEO & co-founder, Porter
5. What percentage of your business is currently into offering first mile, middle mile, and last-mile delivery services? Apart from F&B (eg. Lotte India Corporation Ltd), what are some of the other categories you are partnering with for deliveries? Are you looking to partner with any leading e-grocers/hypermarket chains that are operating in the quick commerce category, for the same?
Uttam - To address enterprise needs in the B2B segment, we have a service called Porter for Enterprise, which is a recent addition to our portfolio that currently contributes to under 10% of our revenue and is fast growing. Our services can be availed by almost any industry for their logistics needs thanks to the industry-agnostic nature of our platform. Our services revolve around all 3 steps of the logistics journey (first- middle- & last-mile delivery). We try to accommodate and hone our platform as per the unique requirements of our users and their use cases without compromise on cost, quality, and delivery standards.
6. What can you tell us about the unit-level economics that has been achieved by Porter since 2014 to now?
Uttam - Porter is profitable at a transaction level, and therefore unit economics is positive. Intra City logistics inherently is a high volume business. We have seen a consistent year-on-year growth of 2.5 times. The intra-city logistics market creates huge defensibility since such high volumes cannot be catered to, without the aid of technology and this is exactly what we strive to achieve at Porter. Our strategy to improve brand awareness is not to use discounting as a practice but to improve brand recall eventually becoming a “Partner of Choice”. This is very evident with our new-customer statistics where 65% of our new customer acquisitions were through word of mouth.
7. How is technology helping Porter help its drivers earn 30% more, customers to save on its logistics costs, have lower wait times, and high availability?
Pranav -Our technology-aided solutions have enabled the creation of a liquid marketplace where customers and driver-partners are seamlessly connected with the help of the app. The solution has resulted in improved visibility for our driver-partners and has made their operations highly efficient. With each successfully completed trip, we move towards a stronger virtuous cycle that helps in creating significant value for all our stakeholders. By partnering with Porter, our driver-partners receive on-time payments credited directly to their wallets at the end of every trip resulting in better working capital for them. Additionally, there are no unfair deductions from their earnings and improved working conditions owing to the flexibility and choice that the platform offers. Real-time location access, preference analysis, and operations are some of the other areas where we are looking at employing technology-aided solutions to improve our services while helping increase driver profitability.
8. What can you tell us about the disruption in the realm of intra-city logistics that has taken place thanks to the Coronavirus pandemic, insights therein, and technology?
Uttam -While the pandemic caused a dip in consumption in metros owing to the reduced spending ability and movement restrictions, the silver lining was that the logistics industry grew especially in the last mile delivery segment. The industry started to experiment with doorstep delivery which promoted expansion. The pandemic also brought to fore the changing trends in customer behavior that we at Porter noticed and quickly made provisions to adapt to. We were able to understand our customer’s nuanced requirements during the pandemic and expanded our offerings by onboarding a helper facility that aids in loading and unloading of cargo. In addition, we have also raised a new vertical from the ground up to address the packers and movers’ segment to assist our customers in their relocation needs during the pandemic. Our learning has primarily been around becoming more user-centric than ever before, thereby paving the way for newer services and offerings such as 2-wheeler delivery and Porter for Enterprise.
Uttam Digga, COO & co-founder, Porter
9. As the sector is looking to incorporate more sustainable practices, is Porter looking to onboard or incentivize e-vehicles or looking to tie up with any companies/fleet owners who have e-vehicles or a fleet of e-vehicles?
Uttam - We are currently working with our driver-owners and partners to enable this shift towards sustainable logistics while also acting as catalysts for change. Currently, we have 500 EVs operational in 5 cities around India and we hope to increase it to 20% of all our operations in the coming years.
10. You have moved from being the 'Uber of Trucks' and since then offered services for city tempo, for enterprises, and for packers and movers along with technology solutions for real-time track and trace. What is the ratio or percentage that each segment brings into your overall business? Which areas do you see growth in and why?
Uttam - Porter for Enterprise and Porter Packers & Movers services we recently launched and yet have contributed to more than 5% each to our overall business each year. The strategic direction to start these verticals has paid back multi-fold by acting as a hyper-growth enabler and both these verticals are growing at an accelerated pace.
11. What can you tell us about the revenues that Porter has clocked this FY and growth projections going forward?
Pranav -Our expected growth for FY 2021-22 is 2.25-2.5 times that of FY 2020-21 and we are well on our way to achieving this growth number. As mentioned earlier, our long-term plan is to achieve a growth of 5 times by March 2024.
12. What can you tell us about the future of intra-city logistics?
Uttam - The need of the hour is to focus on creating an equilibrium between customer preferences and cost pressure on organizations. At Porter, we are constantly on the lookout for opportunities to bring about this equilibrium in the intra-city logistics and logistics- ecosystem with our technology-first approach.