Prittle Prattle News in conversation with Ravi Patel, Chief Strategy Officer, Smartr Logistics
Smartr Logistics is a new-age logistics company for all express logistical needs of customers. Smartr Logistics is the first company in the country to provide express solutions for clients across all segments of customers, like B2B, B2C BFSI, B2C eCommerce, and D2C. With a unique set of Air Express (Aerex) and Ground Express (Wheelex) offerings, Smartr is committed to providing service for all of logistics requirements. Led by industry veterans of the Indian Express industry, the senior management team brings over 300 years of core express industry experience to create an innovative, transparent, and reliable logistics service provider.
Could you describe more about the range of products/ services you offer? What is unique about your business?
Aerex (Air Express): With a unique asset-light model and air network with optimum connections across 30+ airports, Smartr can provide industry-leading transit times across 110+ cities in the country. Aerex Prime is Smartr’s flagship product that offers assured next-day service for important documents (folio) and small shipments (Package). Aerex Kargo provides the fastest transit of B2B cargo shipments of value across the Smartr network. With Aerex eComm, Smartr delivers the most immediate prepaid and COD eCommerce shipments and reverse logistics.
Wheelex (Ground Express): Wheex Kargo service provides cost-effective service to fit all business sizes with Door-to-door express logistics, piece-level tracking, and all types of Value-added services. With fully containerized vehicles and 24×7 tracking, the customers get complete transparency and safety of their commercial cargo.
How did the company raise funding, or are you looking forward to the same?
Smartr Logistics raised seed funding of around INR 100 Cr from marquee investors – IIFL Private Equity and the Jalaj Dani family (Asian Paints) office.
We are now getting into a Series A fundraise, which would be to the tune of USD 30 million approximately. This will help us expand our reach in the domestic market and product offerings. With the fresh round of fund infusion, the target is to reach 6,500 pin codes by December this year and 8,500-9,000 by June 2024.
Why did you choose the logistics industry over any other space?
As part of my consulting career and a short stint in the Venture Capital space, I had the opportunity to work in the logistics space. The sheer scale and impact of the logistics industry always intrigued me. Comprising 14%+ of India’s overall GDP, the sector supports all B2B and B2C initiatives. Our country’s current logistics state has a vast scope for improvement as the average logistics cost per GDP among BRICS countries is ~11%, and the same benchmark for developed countries is in the single digit. Knowing the vast improvement opportunity in the industry, I was looking for opportunities in the space when I heard about Smartr Logistics and met with the founder Mr. Yogesh Dhingra. The vision of Mr. Dhingra and the founding team aligned with my goals, and I decided to embark on the journey to support building Smartr Logistics.
How has the Logistics industry evolved in the last few years?
As a consumer, I have seen the logistics industry’s importance come to the forefront when COVID-19 hit the world, and the economy went into lockdown. The logistics industry provided critical support to run the world during the tough times. Whether it was providing the essential transportation of vaccines and other lifesaving drugs and medical instruments or providing food and other items to the doorstep of each household, the logistics industry ensured that life continued even with the lockdown. Everyone from the government to ordinary citizens realized the importance of logistics, and various policies and initiatives were taken to improve the industry.
As part of the logistics industry, I have seen the industry go through various changes over the last few years. Apart from the traditional B2B logistics, a new segment of eCommerce logistics has seen exponential growth. Be it online purchases of eCommerce items or ordering online groceries or food from restaurants, the logistics use case of B2C has seen a significant increase. The latest trend of 10-20 min grocery delivery and same-day eCommerce deliveries shows that the B2C logistics use cases will continue to grow, and more innovations will come in to provide ease of B2C logistics. The exponential growth has also triggered many technological advancements. We have seen many Indian startups working in the logistics SaaS space to provide tools based on Artificial Intelligence (AI) and Machine Learning (ML) to optimize the logistics cost, bring operational efficiencies, and introduce sustainable and eco-friendly logistics solutions.
What are some Business-to-Customer success factors?
The critical success factor for B2C (Business-to-Customer) businesses is Customer Satisfaction. Providing the service as per the commitment given to the customer is paramount to succeed in this industry. Having a large pool of funds can help acquire customers but will not be enough to retain them.
Sustainable growth is also significant for B2C companies to succeed. With a high flow of funds in the B2C space during and post-COVID, many B2C companies burned vast funds to acquire customers. With the ‘funding winter’ kicking in and runways drying up, companies with solid unit economics and a path to sustainable growth will survive.
How has the B2C outlook changed post-Covid?
While online B2C / online retail was already one of the fasting growing trends before COVID, the segment’s growth saw an exponential increase during COVID. While all forms of physical retail were shut, online B2C adoption accelerated and reached beyond the bounds of just Metro/Tier-1 locations to the farthest corners of the country and just tech-savvy youngsters to users of all age groups. COVID has made behavioral changes in the purchasing practices of consumers that will continue to fuel the growth of online B2C. Post-COVID, with the opening of the retail segment, we have seen consumers returning to the retail experience, but the online B2C and D2C part continues to grow at a healthy rate.
Could you elaborate on the challenges you encountered while establishing and retaining in the industry?
Starting a new venture in the logistics industry has a significant challenge. Logistics is a network business. To create a logistics business, one requires a minimum network of offices and connections across important locations to compete with an established player’s network. And setting up the network requires a substantial amount of upfront investment. Industry veterans started Smartr Logistics with considerable experience building and scaling express companies in India. This not only helped to raise a large seed fund from investors who trusted in the founding team’s capabilities but also helped set up the pan-India network of offices and connections. Within just 100 days of starting the company, Smartr launched its business operations across major cities in India.
Another key challenge was recruiting large employee teams across all levels. Due to the founding team’s strong network of relationships, we hired more than 1,000 employees in the first three months through referrals and networks. Another factor that helped in hiring and retaining employees was ESOP. The company has granted Employee Stock Options to 100+ early employees and plans to expand this pool further.
What would you like to tell the youth of today?
The youth of today is the cornerstone of the Indian economy. They can create new opportunities and drive innovation in their respective industries. As an aspiring youngster, it is essential to remember that success comes from hard work, dedication, and faith in yourself and your ideas. You can achieve anything with determination, resilience, creativity, and passion! So don’t be afraid of failure – take risks with confidence, knowing that if one approach doesn’t work out, another opportunity will always be waiting for you around the corner. Believe in yourself – with enough effort, anything is possible!
Prittle Prattle News composed this article as an Interview.