Higher shipments but e-tailers' delivery time slowed in Q1 FY18

Key Highlights

• Average delivery time increased in the e-tailing industry during the first quarter of FY18.
• Shipments were higher in the same quarter.
• In December 2016, Indian cities had slower delivery performance that Saudi Arabian cities.

E-tailers promoting attractive discounts and deals on their website sure had reeled in the shoppers however delivery time of the sites may have taken a hit.

Robust sales triggered by Goods and Services Tax (GST) in the first quarter of this financial year did not improve delivery times of e-tailers in fact they have increased in this period, a report by RedSeer Consulting said on Monday.

“Shipments handled by industry in Q1 FY18 were ~10-12% higher than Q4 FY16, leading to slower delivery performance from both captives and 3PLs (third party logistics),” the report added.

Average delivery time in days increased in the April to June period the report showed. 

“Average delivery time increased in Q1 FY18 and reached Q1, Q2 FY17 levels,” the report said.

Source: RedSeer Report

In December 2016, RedSeer had put out a report on delivery times in India which were much worse off than other Saudi Arabian cities like - Riyadh and Jeddah. Zeebiz had earlier reported that this delay was primarily due to the complex inter-country and inter-state tax norms.

“In India, 65% of logistics move by road and time spent at interstate check posts due to the difference in taxes between states accounts to idle time (60% of total journey time). This is despite the Indian market being more competitive and mature,” Sandeep Ganediwalla, Managing Partner, RedSeer Consulting said in its December report.

The e-way bill which is supposed to have benefits of complying with strict delivery time has now been pushed to be implemented from April 1, 2018. The GST Council has done so in order for the industry to ‘acclimatise’ itself with the GST regime.

An e-way bill as described by ClearTax is a pre-signed order for transport of goods that is obtained electronically through the GSTN (Goods and Services Tax Network).

Implementation of e-way bill will push for delivery of goods in a distance of 100 kms to a day.

Source: ClearTax