Maersk seems to have taken a remarkably aggressive step into the Indian e-commerce market. In a press release dated 19/6/2023, it announced the launch of its new “eCommerce fulfilment solution,” which offered a “single window access to the entire logistics ecosystem for brands selling their goods online”.
Focusing on the small and medium e-commerce businesses in India, the service offers an integrated service for “a flat rate of INR 80/US$1 per order”. The objective of Maersk is to offer an alternative to the present fragmented market for ‘B2C’ services, with “providing single window access to all required solutions, such as storage in warehouses, last-mile deliveries and executing return orders, all while providing end-to-end visibility at unified pricing”.
Maersk asserts that it will offer much more simple billing as well as ‘One Country, One Price’. The cost of INR80 will include “ 60 days of storage, delivery across India covering 18000 pin codes in 48 hours, 20% returns to origin (RTO) and at no fixed monthly costs or no minimum orders”.
Whilst the offer of such a service would a significant development for an established express-network operator, it is even more notable for a company which, just a few years-ago, was focused on container shipping. It is a considerable development for Maersk to be able to develop a service in India that combines the utilisation of its own warehousing and transport assets, combined with the ‘buying-in’ what must be substantial local services across a huge country with difficult operating conditions.
A notable characteristic of this service is that the service appears to be very much domestic orientated, looking to move products around India, rather than into India. This must count as one of the hardest areas of the market for foreign logistics service providers to enter.
As Maersk points out, the Indian market has substantial growth prospects, however many logistics service providers have struggled to exploit this potential due to the difficulties of operating in India. Those who are capable of coping with India’s idiosyncrasies may find themselves in a very competitive position. If successful, this service would mark an important mile-stone in the strategic transformation of Maersk.
Source: Ti Insights
Author: Thomas Cullen
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