Business Standard

Enter the back end

A lot happens between placing an order online and receiving it. Rrishi Raote steps into Yebhi.com's warehouse to figure out the nitty-gritties of e-business

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Ecommerce leader, 100,000 sq ft warehouse (sorry, “fulfilment centre”), 6,000-25,000 items shipped every day, 500-plus employees at this site — big numbers, but where’s the buzz? Could be a power cut, one thinks, walking into Yebhi.com’s warehouse just off the national highway on the outskirts of Gurgaon. It is cool, dim and quiet, nobody is rushing around, and outside the main door a handful of people not wearing uniforms are sitting or standing around a swing and smoking. What’s wrong?

One of the smokers, it turns out, manages dispatch. is a 20-something in a ponytail, student beard, check shirt (not tucked in), faded jeans and brown boots. He has an air of unhurried competence. It is lunch break, says Chetlur, which explains the lack of buzz. The lack of light is simple energy efficiency.

Dispatch shares the ground floor with “pre-inwarding”, “inwarding” and quality control. On the first floor and in the basement are the two MSAs, or main storage areas. Each floor is about 30,000 sq ft. Goods for sale are delivered by truck direct from the manufacturers at the ground floor, then spot-checked, invoiced, carefully checked again and sent into storage upstairs or downstairs, by sloping conveyor belt. Once sold and on their way out, the goods go through another quality check, are assembled into orders, packed, and handed through windows to courier agencies that have permanent stations on the dispatch floor.

Chetlur’s suede boots were bought from Yebhi. This is part of what makes Yebhi not your typical ecommerce company — it deals mainly in “softline” products like shoes, clothes, accessories, jewellery, colognes, wristwatches and lingerie, apart from home appliances and phones. Ninety in-house merchandisers track fashion trends, chase and negotiate with brands. Softline products are much more difficult to sell online than the highly commoditised “hardline” books, gadgets and phones that other leading e-retailers handle, and “virtual” products like movie or travel tickets, job-search and matrimonials. How does one buy a pair of shoes, or a cologne or a brassiere for that matter, without seeing it or trying it on?

And yet, says Yebhi co-founder Manmohan Agarwal, the company has done well. It is now the second-biggest, and fastest-growing, ecommerce site in India by sales, at about Rs 125 crore, after Bangalore-based Flipkart.com (which claims sales of Rs 500 crore in 2011-12). Yebhi, which began as BigShoeBazaar.com — hence the wide footwear selection — has a registered user base of about 1.5 million people, of whom about half a million have transacted on the site, and 60 per cent of those have transacted more than once; the company saw close to 2.5 million purchases in the last year. Agarwal expects to break even “in 2012-13”. and N R Narayana Murthy’s Catamaran Ventures invested Rs 40 crore in Agarwal’s company in mid-2011.

Some of that money has gone into designing a website that will make it easier for customers to choose Yebhi’s products. As Agarwal says, Flipkart is just “search-based” (“I want a particular book”), while Yebhi is “browse-based” (“I want a shirt”). This translates to selecting more and more features of the product you want, thus narrowing your search results. In the especially tricky case of shoes, one solution Yebhi has developed is to deliver the customer two pairs of different sizes; the buyer can pick the better-fitting pair and return the other to the delivery agent. And even more money has gone into backing up the site “with a fulfillment and delivery service, which”, says Agarwal, “took about one year to get right”.

* * *

This is Yebhi’s fourth warehouse. The first was a single room of 400 sq ft. The second was 4,000 sq ft and lasted five months. The third was 20,000 sq ft and lasted six months. This is the fourth and is five months old. Agarwal expects to shift to a 500,000 sq ft warehouse, also in Gurgaon, within a year. The company is so used to shifting, he says, that it has the process down pat. Not satisfied with the courier agencies, like other major e-retailers it has set up its own delivery service for the 10 major cities where it promises delivery within 24 hours. In the warehouse this in-house service has its own window in the dispatch area.

Dispatch czar Chetlur leads us through the facility, beginning with pre-inwarding, where cardboard boxes full of freshly received products tower to the ceiling. As lunch break ends and the workers — who are mostly male contract workers and identified by differently coloured T-shirts for different functions — return to their stations, lights go on at each workbench. One does random checks of the items, another photographs each item with a web camera, a third prepares invoices and calculates tax depending on the state where the manufacturer is located. High-value and electronic items like jewellery and phones go straight to the secure warehouse in the basement. Once unboxed, all items are moved in plastic crates of different sizes and colours. There is minimal mechanisation; instead of energy-guzzling conveyor belts or forklifts there are pullable trolleys.

At one of the 40 quality control benches, two quiet men in red T-shirts are checking Puma vests. They have two choices: accept, reject. So they compare each vest with the web camera photo on the screen, check for dirt smudges or torn cloth. If it passes, they fix a bar code on it, slip it back into its plastic sheath and put it into another plastic crate to go to the MSA. When the vests are complete, they switch off the light at their desk.

In the MSA are rows and rows of tall metal shelves divided by aisles along which narrow trolleys are trundled by a small staff. The higher shelves hold larger items like shoeboxes, the lower shelves have clothes. But items are not otherwise arranged by category or brand: each Puma vest may end up on a different shelf. A young “picker”, one of five or six on duty at any one time, shows how it’s done. A small HTC tablet is strapped to his left wrist, and in his right hand is a scanner. While shelving an item, whether a pair of socks or a big stovetop, the scanner captures item as well as location (“inscan”) and puts both in the system wirelessly. Therefore, even if one vest sits amidst a dozen pairs of jeans, it will not be misplaced. Each picker walks 6-8 km a day in the MSA.

When retrieving an item that has been ordered (“outscan”), a “pick order” will come direct to the wrist of the picker handling the rows on which that item has been placed. Back into a coloured crate and back up or down the conveyor belt it goes, to outward quality control. Humans who leave the MSA are frisked; Chetlur says pilferage is zero.

* * *

On the dispatch floor again, items are prioritised according to first ordered, first out, for which Chetlur has invented a system of coloured flags. A pair of boots is checked: it must match the photo on screen, the soles are compared for size, and then the boots are weighed for the courier. The shoebox is tagged and sent for packing in Yebhi’s customary grey flexible plastic covers.

Tall shelves nearby carry parcels ready to be shipped. A computer prints an address label and identifies all items in a single order. It also, courtesy Yebhi’s proprietary algorithms, decides which courier service will perform each delivery. Then Yebhi workers deliver each package to the correct courier window.

Agarwal says that of India’s 21,000 PIN code zones, Yebhi has serviced customers in 11,000 — 65 per cent in Tier II and III towns, even a village in Nagaland. “All the couriers put together,” he says, “do not reach more than 7,000-8,000 PIN codes.” For out-of-the-way places there is government Speed Post, though no cash-on-delivery and no time guarantee. Any customer can track online how his purchase is handled at every step, to the minute, from the warehouse to his front door.

Chetlur says he must dispatch purchases within 48 minutes of the order being placed online. “If the website says delivery time 48 hours, I want to give the courier 47 hours and 12 minutes.” That is the goal, Agarwal says, but the median is one hour. “We have to catch the two courier dispatch times of 9.30 am and 5.30 pm. If we miss one then there is a 12-hour delay. The 48-minute target is to make sure there is no pileup towards the dispatch time.”

The last function in the “fulfilment centre” is photography. Pradeep Hooda, a 30-something in fashionable hairstyle and shoes, supervises the shoots that produce the images seen by shoppers on Yebhi.com. He is contemptuous of mannequins, and employs live models four days a week. At the moment stacks of blue crates are being carted into the studio. “We are changing the look for footwear groups,” he says. “You should be able to see as much as possible,” not just the top of one shoe and the sole of the other. “We are re-shooting all the shoes.” His team has also re-shot the lingerie. The inspiration is Victoria’s Secret; so the new images show the model posing sexily, tossing her hair, and so on.

This, then is Yebhi’s back end. “The moment you press ‘Buy Now’,” says Agarwal, the whole organisation springs into action, from confirmation call to shipping out. The entire process was designed in-house and Yebhi has applied for patents. “The beauty of the challenge is to work out a workflow where very large volumes can be handled without chaos.”

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