Sending a courier has never been an easy task for us until some corporations specialized in courier services emerged. As you know logistics is a crucial sector of a country, therefore, certain startups grabbed this opportunity to improve the courier-delivery system of India. One such company is “Delhivery.” Established as a startup in 2011, it saw massive success within eight years of existence. In 2022, the valuation of Delhivery was USD 4.77 billion. That’s exponential growth! Do you ponder too how it jumped to this extraordinary success within a short period? Well, that’s obviously due to their brilliant business model. So, in this article, we will decode the “Business Model of Delhivery.”
We will explain the topic in three parts-
- Working Strategy
- Marketing Strategy
- Revenue Sources
Working Strategy (Business Model of Delhivery)
The principal working strategy of Delhivery is to modify the logistics industry of our nation through advanced network designs, infrastructure, strong partnerships, and technologies. Also, it is looking forward to expanding its hands in foreign lands. Delhivery ensures the accurate delivery of packages with two critical investments namely “Technology Foundations” & “Processes.” The former aids to monitor, understand, and automate the tasks. Whereas the latter makes efficient repetition of the tasks. It mainly specializes in warehousing, transportation, and commerce.
Courier Service (Business Model of Delhivery)
Delhivery works in Shipping & Logistics field with e-commerce companies as well as SMEs (Small and Medium Enterprises). It can deliver anything ranging from large furniture to delicate and expensive jewelry. Now, you will get to know how the courier service of Delhivery works.
- Step1: The product comes to the Fulfillment Center
It refers to a place where goods are stored, packed, and sent to the customers who have ordered them. Delhivery has more than 80 fulfillment centers all over India. With a proper warehouse management solution, Delhivery can identify the right storage shelves, track the movement of a package, make shipment decisions, etc.
- Step 2: In Processing Centre the product gets ready for shipping
Here, the sorting, bagging, and preparation of packages for shipping take place. Also, it receives the pre-packed consignments directly from the clients. The cross-belt hybrid sorters automatically segregate and group the packages based on their target delivery cities.
- Step 3: Product reaches the Origin Hub
In the origin hub, all the products are stored after collecting from different sources. The origin hub act acts as a gateway for delivery. They sort packages based on the delivery destinations. Then, they connect to the network of the destination city and dispatch them finally.
- Step 4: Product goes to Destination Hub
The destination hub receives packages that need to be delivered to its location. The worker sorts and groups the products according to the pin codes. Then, they dispatch the groups to their respective Inter-processing center.
- Step 5: The product reaches Inter-processing Center
The inter-processing center acts as a smaller hub for specific pin codes of the city. They use vertical sorting frames and designated bag slots to de-bad, sort, and re-bag the packages. Then, they move the product to the dispatch center.
- Step 6: Finally the products go through Dispatch Centre to reach the customer
This is the last-mile delivery center. Also, it is the final step where the delivery executive picks up the order, de-bag it, and gets out to deliver it to the customer. They organize the delivery executives according to locations and the best delivery routes for the best optimization of efficiency. Thus, the product reaches the doorstep of the customers.
Same-Day Delivery Service
This feature efficiently increases the sales for D2C (direct-to-customer) brands. However, the same-day delivery service is possible only if the inventory is located in the vicinity of the customer.
It has numerous competitors like Blue Dart and FedEx. DHL, etc. However, the toughest and largest competitor of all of them is the “Speedpost” of the Indian Postal Service. Therefore, Delhivery focuses on providing the best courier service along with customer care support to thrive in the competitive delivery market.
Revenue Sources (Business Model of Delhivery)
Being established as a network delivery model, it operates with considerably high margins. You must be wondering how Delhivery makes money. It makes money from various revenue sources. Some of the major ones are-
It earns profit on every unit it delivers from the first mile to the last mile. The first mile refers to the point where Delhivery picks up a package from a merchant. The last mile refers to the point where the package is delivered to the customer. In between multiple shipments of the packaging, units take place. Thus, it is economically profitable while delivering each unit (product).
Optimizing transportation costs
Delhivery optimizes its transportation costs by using the most cost-effective route. Even though it is not a direct source of revenue, it helps Delhivery to save a huge sum of money.
Orion is one of the latest products launched by Delhivery. It is a truckload-freight brokerage platform connecting shippers with fleet owners and suppliers of truckloads. The registered agents and fleet owners bid for these services in Orion through in-house applications. Thus, Delhivery earns good revenue from the bidding process in “Orion.”
Marketing Strategies (Business Model of Delhivery)
This is a crucial step for any startup. The objective of marketing is to create awareness among the audience. Also, the conversion of the audience into customers is the result of a successful marketing strategy. Therefore, Delivery opted for various ad campaigns to enlarge its customer base.
Here, the goal was to showcase Delhivery as the leader of the best delivery service. So, it created a series of ads mainly targeting business owners. It showed how Delivery provides exclusive delivery services (both small parcels and heavy goods at bulk loads) in India. The taglines were “Whatever size your business is, the answer is Delhivery” and “Wherever your shipment has to go, the answer is Delhivery.” Consequently, this led to a 27% increase in sales YoY (Year over Year).
Going live in ONDC Platform
ONDC (Open Network for Digital Commerce) is an autonomous open network system that provides e-commerce facilities to catalyze the connection between buyers and sellers. ONDC is a government initiative to democratize the e-retail ecosystem in the country. Thus, Delhivery went live on ONDC to begin intercity deliveries across more than 18,000 pin codes in the country. This was beneficial for Delhivery as well as the small businesses backed by the government. The former increased its user base whereas the latter was able to place its foot in the market.
Social Media Campaigns
Delhivery effectively utilized social media platforms like Twitter, Facebook, Instagram, etc. to reach the target customers and businesses. It created various campaigns. Some of the prominent ones were #Delhivery #DelhiveryHelpdesk #CustomerCare #WeCare #SupplyChainManagement. Also, it had catchy taglines like “Worried about your package? Don’t be! You can easily track your package using your mobile number/AWB/LRN on delivery.com” and “Delhivery works 24*7*365 just to make the world small. #SmallWorld #Delhivery #SmallWorld #WeDelhiver #AtYourService #DeliveringExcellence #24×7
Just like Zomato, Swiggy, Nykaa, Meesho, etc. Delhivery is also a prominent as well as successful startup in India. It effectively changed the logistics game and Indian e-commerce. The business model of Delhivery has been successful. Despite several ups and downs, it is constantly working to stick to its vision of “delivering anything anywhere in India.”