Between the country's three main ecommerce-focused logistics firms and new-age logistics aggregators, a new war has emerged. According to people familiar with the situation, Delhivery, Ecom Express, and Xpressbees have all hiked shipment prices by as much as 35-40% for orders received through online logistics aggregators like Shipyaari, Shiprocket, Pickrr and others
According to sources briefed on the situation, the price increase took effect earlier this month as a result of logistics companies realizing that aggregators were giving aggressive pricing for per-shipment deliveries compared to their own rates for corporate clients or even SMEs (small and medium enterprises).
Intermediaries like Shiprocket don't have their own warehousing or delivery systems. They collect orders and send them to firms such as Delhivery, Ecom Express, and others. While firms like Delhivery, Xpressbees, and others engaged directly with commercial clients with bigger shipment volumes, these platforms began to acquire popularity for aggregating delivery orders from specialized direct-to-consumer (D2C) brands, local businesses, and other SMEs.
According to sources, ecommerce-focused delivery companies were also alarmed by aggregators wooing some of their enterprise clients with lower rates. They (the three major players) have banded together and raised aggregator rates at the same time, beginning April 1. In some circumstances, the rate rise can be as big as 50%.
Requests for information were not answered by Delhivery, Shiprocket, or Pickrr. TA Krishnan, cofounder and CEO of Ecom Express, Amitava Saha, cofounder and CEO of Xpressbees, and Nayan Ratandharaya, cofounder and CEO of Shipyaari, all declined to comment. Aggressive pricing has caused tremendous disruption in order to continue to boost cargo numbers. They (delivery businesses) now have to share their bandwidth on these clients for smaller orders from aggregators, while enterprise clients have questioned how an aggregator can offer them lower pricing than when they engage directly with a delivery firm. All the big players have joined together and implemented this without giving us much time to think, says a note from Shipyaari to its clients.
Xpressbees, for example, has hiked rate slabs for aggregators, according to sources briefed on the situation. Clients who place 1,000 orders per day, 5,000 orders per day, and so on will be charged the new rates. Similar procedures have been used by Delhivery and Ecom Express. Surprisingly, the aggregators' rates have risen at a time when many of them are in various stages of discussions to seek fresh money at higher values. Pickrr is doing due diligence for a new round of funding, according to sources. After a $185 million round headed by Zomato, Temasek, and Lightrock, Shiprocket, one of the top aggregators, was valued at $900-950 million. It's rumoured that it's looking into a new round of funding of significantly higher valuation.
On February 10, Xpressbees became a unicorn after finishing a $300 million investment round, while Delhivery and Ecom Express were working on plans for a listing, which have now been postponed due to market instability, particularly for new-age companies. The rise in charges has yet to be fully passed on to clients through aggregators. According to the people quoted above, it's unclear how long they plan to continue serving orders at the old rates.
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