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Why Flipkart’s tying up with Mumbai Dabbawallas is a great move

Allow me to start with saying that I am not plugging for Flipkart, and have no love lost for a company with no customer service. But, when something is well done, it is well done.

Flipkart’s tying up with Mumbai’s Dabbawalas is a straight shot brilliant move. Whoever in the company came up with that, thought really out of the box. So, how would this work?

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Flipkart aims to use the Dabbawala’s to deliver the goods when these guys go to pick up the empty lunch boxes. Now their empty run is now being paid for, and they actually have pay load. When they are making their return run with the lunch boxes, they would have made their extra loads and would not be returning heavy either. Because their empty ferry will now get paid for, the cost that Flipkart will have to pay will actually be lower. Certainly lower than what they have to pay for their current last mile drops.Why

The Mumbai Dabbawallas bring to the table their rapid delivery with a Six sigma level accuracy.

What Dabbawalas bring to the table is their accuracy of rapid and on-time delivery. They operate at a Six sigma level of accuracy with really no technology or even paper based system for tracking. Essentially, there is no operations management type of cost at all. That perhaps would need to change a bit for the deliveries that they make for Flipkart. Some amount of paper based (at least) systems will have to be introduced, and there in lies the risk of their Six Sigma levels dropping a bit.

Now only if the ecommerce company could find Dabbawallas in other cities, their per shipment operating cost would be under control and perhaps they would be a viable business too.

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The Power of Tier-2, and Tier-3 locations in India

If you are even remotely interested in the progress of Retail and Ecommerce in India, you are surely aware of how large an impetus our Tier-2, and Tier-3 cities and towns can provide. In our experience, the basic factors which create an impact in consumer behaviour in these locations are:

  • Penetration of mobile technology, and hardware thus creating easy access to the Internet.
  • Availability of cash to make purchases, and the existing desire created by other media.
  • Lack of easy availability of material for purchase.
  • Lack of steady internet connections, and thus dependence on Cyber Cafes for making purchases.

Read through the slides below to know more about these trends as we discovered from our study.

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