Introduction
Delhivery is an 11-year-old startup dealing in pan-India delivery services. The business Model of Delhivery involves its business Plan, Revenue model, its competitors, SWOT Analysis and many more. They provide last-mile delivery, transit warehousing, reverse logistics, payment collection, seller-to-warehouse shipping and seller to customer shipping, etc.
Earlier, they started off with an extremely local delivery service. They used to help restaurants to deliver food packages to the customers. Then, they started delivering packages for E-commerce companies and this turned out to be a major breakthrough for them since the E-commerce revolution was there to lift their business up. With time, delivery started disrupting age-old players in the business serving the best.
Business Plan
Delhivery is one of India’s largest B2B, B2C and C2C logistics courier companies with a vast supply chain infrastructure. A major reason why the business model became successful was the competitive shipping rates and zero subscription fee.
Delhivery primarily makes money from five business segments: parcel delivery for businesses, consumer to consumer parcel delivery, freight services(truckload & partial truckload), warehousing, cross-border logistics. The lion’s share of Delhivery’s parcel delivery revenue comes from Indian ecommerce biggies like Amazon, Flipkart, and more. However, with larger e-commerce players looking to build in-house logistical capabilities, Delhivery’s parcel revenue is expected to shift to smaller upcoming direct-to-consumer ecommerce companies that prefer to outsource logistics.
The company’s services can be divided into 3 verticals:
- Warehousing
- Transportation
- E- Commerce
Revenue Model
- Out of all the deliveries, express parcel makes out the biggest revenue accounting for 70% of the profit. For this, they have joined hands with E-commerce biggies like Flipkart and Amazon. The next major source of revenue comes from Part truck load and truck load accounting for 16% of the total. Here, you can either own the entire space or simply a defined part of it.
- The other 8-10% of revenue comes from the warehousing facilities they provide. Plus, they also earn through cross-border logistics. Delhivery has also created a space called Orion. It connects the truckload capacity to customers. Furthermore, agents can bid on Orion for contracts.
- And Lastly, the additional source of Income comes from Insurance, loading and unloading, cash-collection fees and pick-up, etc.
Competitors
It has been a hyper successful decade for Delhivery, but it has chosen a market aleady consisting a major number of players. Here is the list of some of those players:
- Bluedart
- Ecom Express
- Delivery.com
- Gati
- DTDC
- FedEx
SWOT Analysis
Strengths
- Branding – Delhivery has a strong branding image and brand equity.
- Global Presence- It has a global presence with its services in over 220 countries, the company is globally recognized.
- Advanced Technology– It has smart truck technology with “intelligent” pick-up, route planning technologies
- Extensive Network– Delhivery has the most extensive domestic networking which covers over 21,000 locations.
- Marketing– Good advertisement and visibility to reach out to maximum people in a creative way.
Weaknesses
- Less Visibility– Delhivery is lesser know when the comparison is made to global players on a higher level. It needs to work on its brand visibility by focusing on its marketing.
- Lack of Proper Training– Lack of training to courier and delivery people who directly meet the customer is a problem as they are the face of the company.
Opportunities
- Global Expansion – Delhivery can expand on a global level and aim for better penetration.
- Diversification– The rural areas of India are having an increase in logistics, the company can expand its services to villages and rural areas.
- Increase in Trade – Rise in trade around the globe in manufacturing goods will lead to an increase in the transportation of goods leading to an increase in business of Delhivery.
Threats
- Political Situations– Bad economic & Scenario related to politics
- Fuel Prices – The hike in prices of fuel is a serious threat for the company as its whole business depends on fuel and road transportation.
- Different Regulations – Set of Rules and Regulations are different in different countries resulting in delayed operations and deliveries.
Conclusion
Delhivery is keen on investing huge sums in building trucking infrastructure. Moreover, it’s going to invest a whopping sum of 300 crores to expand its fleet size to a great extent. Their IPO would be valued at $1 billion as per the Aug 2021 reports. The company has an advanced technology system to properly function its services. It needs to work on its visibility and expansion in rural areas to become a leader in the logistics industry.
