Supply Chains Pose Challenges for India E-commerce

Supply Chains Pose Challenges for India E-commerce

India is the world’s biggest untapped shopping market says the Wall Street Journal, as it traces one online order and its delivery on a 1200 mile journey from Surat in the western state of Gujarat where the garment was manufactured to Madurai in the eastern state of Chennai where the customer was located.  The journey—about the same distance as New York to Kansas—involved at least 30 people, two overnight truck journeys and a long-haul flight!



The Order:

Ms. Rajamansingh orders a $3.06 sari on an e-commerce site where around 80,000 products are ordered daily. However, that figure can shoot up to 240,000 on Sunday sale days. Shopclues receives 70% of its orders from outside India’s metros (such as New Delhi and Mumbai) mainly from Tier II and III smaller cities and towns.


Distance: 0

Cost: Negligible

Mode: Internet

Time: Negligible


The Journey:


Fabdeal, the manufacturer of the sari, ships the parcel from Surat to a warehouse in Bhiwandi on the outskirts of Mumbai. Transporting by road has its challenges of negotiating poorly maintained roads in various parts of the country, coupled with the flooding caused by rain in the monsoon seasons.


Distance: 162.4 miles

Cost: $ 0.11

Mode: Truck

Time: 8:30 hours (compared to about two-and-a-half hours for a similar distance drive from Washington, D.C. to Philadelphia.)



From the warehouse in Bhiwandi the packet is transported to the airport in Mumbai.

Distance: 41 miles

Cost: $0.02

Mode: Truck

Time: 4:17 hours


Most online orders travel on commercial flights and delays are common due to space constraints in the hold, as also because of packets being rejected if the airline staff suspect prohibited items such as batteries in the package. For e-commerce companies, the difference between profit and loss is often whether a package travels by air or by road.



Ms. Rajamansingh’s sari then flew a day late from Mumbai Airport to Chennai Airport since it missed catching the earlier flight.

Distance: 643 miles

Cost: $0.33 (half the total shipping cost)

Mode: Plane

Time: 4:47 hours


The package arrived late in the evening in Chennai and it missed the single, daily truck that plies between Chennai and cities farther south such as Madurai.


Distance: 292.6 miles

Cost: $0.18

Mode: Truck

Time: 10:40 hours


The last lap from the city of Madurai to Ms. Rajamanshingh’s door was completed by a man on a motorcycle



Distance: 2.1miles

Cost: $0.002

Mode: Motorcycle

Time: 20 minutes


Distance: 1159.5 miles
Delivery Cost: $0.70
Modes of transport: Three
Time in transit: 32 hours 25 minutes
Total time: Two days, 19 hours, 6 minutes

Fabdeal, the company featured in this story is one of many companies that has benefited from the boom in online sales. Before it began its e-commerce business in 2012, sales grew 10%-15% a year, now they are growing by 50% a year.



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