Management Aptitude Test 2018 Paper

PASSAGE−II

E-commerce logistics companies, engaged in the Business to Consumer (B2C) space, are diversifying their offerings due to sluggish growth in this sector, with top online retailers like Flipkart and Amazon in sourcing more than half of their logistical requirements through E cart and Amazon transportation services respectively. Players like Delhivery, Xpress-Bees, Shadowfax and Loadshare have extended their offerings to the Business to Business (B2B) segment, treading into a space currently dominated by the likes of Rivigo and Blackbuck. Industry experts, however, believe that there is ample space for multiple players to co- exist due to the large market size. The e-commerce logistics market in India, according to a KPMG report, pegged at $ 0.46 billion in 2016, is expected to grow to $ 2.2 billion in 2020, at a CAGR of 48%. 'The B2B logistics market, on the other hand, is currently estimated at $ 20 billion, making it a much larger opportunity. Gurugram-based Delhivery has been experimenting with B2B logistics since early last year and is experiencing a high double digit month-on-month growth. 'The company has also ventured into cross-border logistics over the past couple of months with a majority of business coming from China. Delhivery caters to clients in the fashion, auto, pharmaceuticals and consumer electronics sectors for B2B logistics. Similarly, e-commerce logistics company Xpress Bees, started its B2B logistics arm within electronics, pharmaceuticals and durables around 2-3 months ago. While it presently constitutes less than 10% of the overall business, it is expected to form half of the total revenue in the next five years. Barring a few companies, B2B supply chain market is fragmented, but the transition from B2C to B2B is a fairly smooth process. It was recently reported that Chinese internet giant Alibaba Group holdings is in talks with an Indian company to pick up a significant minority stake. Even relatively smaller players like Matrix Partners-backed Load share and Eight Roads Ventures backed on-demand delivery service Shadow fax have started dabbling in B2B logistics services. There’s not much going in e-commerce logistics, while there’s 2 lot going on in the B2B space, which is one generation behind. This is why they want to take the e-commerce sophistication and apply it to B2B conventional logistics. However, one of the challenges is that the B2 market is extremely fragmented and is far more sensitive to cost than service.