Fulfilment centres and Indian E-commerce Industry

Fulfillment Centers

When it comes to retail, no other sales channel is growing faster than e-commerce sector. Convenience, Price comparison & home deliveries have added value to booming online retail Industry. The fastest growing e-commerce market is India & China. Faster delivery requirements from customer side & Cost cutting targets of E-commerce companies have given rise to the Various Fulfillment center. Strategically companies are looking to build bricks behind every click.

Faster Internet Penetration and other enabling devices have resulted in the surge of demand for e-commerce sales. Indian e-commerce industry is lagging behind because of poor infrastructure and unclear FDI policy on Investment opportunities.
Users on Technology

The need of Fulfillment center is in upswing because of below factors:-
1. Faster Delivery: - Earlier all companies were maintaining 1 or 2 big warehouses and they were supplying across India. The reason of many modes was because of less frequent orders although these orders were bulk and of high value. In current situation e-commerce empowers end customer more than CnF agents. As the customer is directly engaged to a big retailer and is making payments directly to them, they demand faster delivery of products. These requirements are possible if these centers are situated near to locality of end customers.
  • Location of FC: -  Location of FCs is the most important factor which determines faster delivery. Along with location, route mapping plays a very important role for faster delivery. These FCs normally work on “Hub & spoke “ Model and advisedly it should lie near to any logistics clusters.
  • Order Fulfillment report: - Local FCs if integrated properly to IT system can give e-commerce companies report of replenishment.
  • Order Prioritization: - Based on customer priorities local FCs has bandwidth to dispatch orders.
  • Merchandise sourcing from local markets to fulfill orders. This gives an opportunity to local vendors and empowers them in a good way.

2. Accuracy: - Assortment of goods and accuracy in delivering correct product happens through IT enablement in these FCs.
3. Cost Cutting: -If the product is situated near to end customer, time spent and cost incurred to deliver products to them will be faster.
4. Reverse Logistics: - Any return (RTO) cases due to faulty product delivery or customer unavailability can be done by these localized fulfillment centers. It results in Faster and Hassle free returns.
5. Shared Inventory: - One FCs can be shared by multiple retailers making it more cost effectively.

The Way forward
Warehousing forms an important constituent of the supply chain as it is where goods are getting manufactured, stored & distributed to the point of consumption. Warehousing inclusive of FCs accounts to 20 % of supply chain cost. Space covered under these FCs are continuously increasing at very fast pace.
Roll out of GST may streamline the process of Warehouse creation and new investment opportunities for entrepreneurs. India’s Fulfillment centers technology is improving compared to traditional warehouses with upswing demand in logistics, retail market & Manufacturing sectors.
Indian Railways has recently leased out some of their vacant unutilised space to few e-commerce players and few courier companies. As these are located inside main city and rail network can be utilized to transport goods at much faster pace.


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