Connect India, a Bengaluru-based start-up in logistics space, is building a new model wherein it is helping e-commerce firms reach out to smaller towns and rural areas using common service centres (CSCs) and well local kirana stores.
Implemented under the National e-Governance Plan, formulated by the Department of Electronics and Information Technology (DeitY), CSCs help people in rural areas avail various e-governance services, hassle-free. There are about 130,000 CSCs active across the country.
"Having seen this network, the question was how to use these unutilised economic assets and convert it into a last-mile delivery option and likewise cater to the e-commerce demands in the country," says L R Sridhar, founder and CEO of Connect India.
Connect India says it independently ties up with entrepreneurs who run CSCs, to act as last mile delivery units. The start-up as already partnered with around 600 CSCs, and is looking at take this to around 10,000 by the end of the current financial year.
The company has recently secured Rs 32 crore from Aavishkaar, an early stage investor.
Sridhar, who has been working in the logistics space for over 40 years, says there is a huge potential to enable last mile connectivity in semi-urban and rural India with the boom of e-commerce in the country. The e-governance efforts by the Centre has already created good infrastructure in rural parts of the country, he adds.
Connect India works on an entrepreneurial model. Every Connect India Centre (CIC) is run by an entrepreneur who gets paid for every shipment going through his/her centre. They are provided with the necessary mobile technology, free of cost. These CICs act as the local delivery units from where goods are delivered to various addresses in the locality.
The advantage of these centres is that they understand the neighbourhood well and work from dawn to dusk, said Sridhar. Each CIC can handle a maximum of 250 packages with about seven-eight delivery boys, according to the demand, and has the potential to create an additional 300,000 jobs.
The line-hauls are managed by Connect India, which means that the logistics firm picks up the product to be shipped from the warehouses of the e-commerce players and drops it at the respective CICs.
Connect India works on a revenue-sharing model with the CICs currently. Going ahead, the company says it will look to adapt to multiple modes of revenue by becoming the dropboxes for all domestic, international as well as banking needs in India.
"The idea is to connect with 27,000 pin codes and establish 50,000 outlets across the country. This means that we will reach every 10,000 population," Sridhar says.
Currently, Connect India has about 200 people on its rolls, and is active across 150 locations. The company started its pilot project in January with Amazon who is now one of its clients. Going ahead, Connect India plans to bring a host of e-commerce firms on board.
The Indian e-retail market is pegged at $6 billion this year and is expected to grow to $20 billion by 2017. "This means that the industry is talking about three-four million packages being delivered in next three years," Sridhar says. "At the current rate, it will be unimaginable to manage this. So, the best way to do is create last-mile distributions through partnerships. Our aim is to connect the 600 million rural population to the urban parts and build a convenience model for the urban parts."
The company is looking to create one-kilometre radius distribution platforms in metropolitan cities. "Technologically, we have created a model through which we plan to create one distribution outlet per pin code, through neighbourhood stores including medical stores, kirana shops, departmental stores, etc," Sridhar said.