Ecommerce fuelled IPO-bound Delhivery’s run. What’s next?

One core belief underpinned Delhivery founders’ plans when they launched the company in 2011 — that they were betting on India’s internet story, primed for explosive growth, rather than on the logistics industry’s inherent potential alone. 

Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan and Kapil Bharati started off with food-delivery services before becoming highly focused on ecommerce, which emerged as a vaster market.

At the time, traditional logistics companies were not geared to cater to the demand generated by online shoppers. They mainly moved B2B packages of documents, whereas the delivery of consumer products required very different warehousing, last-mile and payment-handling capabilities. Cash on delivery, for instance, complicated the firms’ backend processes. 

Established players such as Blue Dart and Gati perhaps didn’t see merit in building new infrastructure because a) the overall online retail market had not hit $1 billion in sales and b) platforms like Amazon were yet to enter the scene. (Amazon’s Indian marketplace went live in 2013.)

For these players, ecommerce deliveries were an afterthought. “Before the Covid-19 pandemic, traditional retail adopted ecommerce but never fully embraced it. Similarly, traditional logistics companies incorporated it into their existing document-delivery infrastructure in 2014 but didn’t build separate capabilities, which led to higher costs,” explained an investor in the logistics space.