Delhivery IPO

Delhivery Business Strategy

1. Expand investments in infrastructure and network

Delhivery Limited will continue to expand their operational capabilities and expand network infrastructure and capacity across business lines.  They have commissioned mega-gateways that will go live in Tauru (Haryana), Bhiwandi (Maharashtra) and Bengaluru (Karnataka). The company expects to build new integrated facilities and mega-gateways in major cities, further expand capacity at existing automated sort centers, commission new sorters at strategic locations and invest in portable automation to enhance capacity at collection and return centers and intermediate processing centers.

2. Continue to build scale in existing business lines

Delhivery Limited will continue to invest to gain scale and increase market share across business lines. They are in the process of integrating the Spoton and Delhivery infrastructure and technology systems, in order to enable the company to deepen synergies between their part truckload and express parcel businesses, while also creating larger base volumes for their truckload freight exchange. They also expect to continue to improve operational productivity through automation and technology systems. In addition, partnerships such as the one with Aramex and their prospective strategic alliance with FedEx offers them the opportunity to combine the strength of their global partners’ extensive network with their domestic leadership and rapidly scale up their new cross border business.

3. Deepen the company’s customer relationships

Delhivery Limited will continue to expand wallet share with existing customers by designing customized and integrated supply chain solutions for their specific needs and industries and introducing practices from their experiences with other customers. Delhivery Limited intends to increase their penetration of new industries like healthcare, distribution, agriculture and commodities, among others. Postacquisition of Spoton it has further expanded their customer base. They will also intend to launch new services and capabilities such as traditional non-express PTL freight, domestic airfreight, intracity distribution, and temperature-controlled logistics to expand their value proposition to existing and new customers.

4. Enhance the company’s software and hardware technology capabilities

Delhivery Limited will continue to reinforce their innovation capabilities by building innovative technology and data systems and investing in the best engineering talent. They are in the process of deploying automatic guided vehicles, automatic storage and retrieval systems and unmanned aerial vehicles for parcel sortation, material conveyance or last mile delivery, and customized “soft robotics” or “exoskeleton” products to reduce fatigue for workers engaged in repetitive, labour-intensive tasks such as loading and unloading. The company has also begun to transition more of their cargo and two-wheeler fleet to electric vehicles. In addition, they are also testing UAV operations for specialized delivery use-cases and scaling up their capabilities in machine vision. They have set up technology development centres in Gurugram (Haryana), Hyderabad (Telangana), Goa and Bengaluru (Karnataka) and intend to add new centers in India, as well as in Europe, Middle East and Southeast Asia.

5. Externalise company’s logistics operating system

Delhivery Limited has facilitated machine learning and artificial intelligence driven real-time business decision making in their day-to-day operations. They believe that the common standards and guidelines enabled by their OS drive efficiency within the Delhivery network will reduce high inefficiency costs across traditional siloed supply chain and logistics systems globally.

6. Create new adjacent growth vectors

Delhivery Limited will continue to develop large, new growth adjacencies that enhance their interlocking flywheel strategy, leveraging on their operational scale, rapid growth, large ecosystem of engaged partners, network design, sophisticated technology systems and access to vast amounts of data. Additionally, they plan to offer value added services, such as highway assistance and routing and tracking software for fleet owners and suppliers of truckload capacity. Similarly, the company has the ability to combine their fulfilment, logistics and payments processing expertise to simplify distribution for their customers in the FMCG and retail verticals. 

7. Expand into high-growth international markets

Several emerging markets share operational and structural market challenges that are similar enough to India to benefit from Delhivery’s set of technology and network optimization tools. Delhivery successfully introduced part of their fulfilment and transportation technology stack in Bangladesh and Sri Lanka, in collaboration with local partners. They will continue to expand their presence in other such international markets selectively and through capital-efficient, partnership-driven models. Pursue strategic alliances and select acquisition and investment opportunities Delhivery will seek strategic alliances with global and domestic leaders in various segments of the logistics industry that bring synergies to their business. They will also continue to look for highquality acquisition and investment opportunities within and outside India that are complementary to their business or that enable them to build new, valuable capabilities for their customers, strengthen or establish the company’s presence in their target markets in India and globally, enables them to gain access to software and hardware technology, expand their customer base or gain excess to a skilled team.

• Strengths

  1. Delhivery has been hailed as the largest and fastest growing, fully integrated services player in the country, in terms of revenue
  2. Delhivery a team of 474 engineers, data scientists and product professionals, that have built a proprietary technology system that helps the company in offering services to a wide variety of customers
  3. Delhivery has a huge data intelligence capability
  4. Their dynamic network makes it easier for them to respond rapidly to changes in volumes, shipment profiles and environmental conditions
   

• Risks

  1. The company fails to maintain its existing network infrastructure and grow at a steady pace 
  2. Disruptions to the transportation facilities and logistics 
  3. If the company fails to attract and retain skilful workers and there are increases in costs of labour
  4. Inability to pass on additional operating expenses to customer due to highly competitive nature of the industry
   

• Interesting Facts

  1. Delhivery has 20 fully automated sortation centers along with 86 gateways that automate close to 4 million shipments in a day
  2. Delhivery has built a very asset light operation model vis-a-vis it's competitors in logistics space
  3. The logistics startup provides delivery for express parcels, payment collections along with fraud detection and product identification