India’s e-commerce market is growing at an incredibly quick pace and expected to be worth $100 billion by 2020. All online sellers, however, face a major hurdle: the country’s underdeveloped logistics infrastructure. A new startup called QikPod wants to help by building the world’s largest network of smart lockers, where shoppers can pick up packages, in Indian cities.
Founded by serial entrepreneur Ravi Gururaj, QikPod is still preparing to launch its pilot programs in January, but has already raised $9 million from Accel Partners, Flipkart (one of India’s largest e-commerce sites), logistics company Delhivery, and Foxconn Mobile (the lockers will be built by Foxconn). One of Gururaj’s previous companies, VMLogix, was acquired by Citrix in 2010.
Gururaj says he wanted to do something in the e-commerce space, but didn’t want to open yet another online store.
“I went to look at logistics and saw that the last few hundred meters in the logistics chain seems to involve a lot of friction,” he told TechCrunch. “You have to be at home to receive a package and leaving a package on a doorstep, which you can do in parts of Europe or America, doesn’t work in India because it will get pilfered.”
Most shoppers want to receive their packages between 4pm and 7pm, which is bothersome for companies because that’s during peak rush hour. Gururaj says lockers not only save both sellers and buyers money, but also ensure extra security because fewer people have access to customer information like addresses.
Packages will be delivered in batches of up to a 1,000 to QikPod’s lockers, which send a notification with a code to shoppers’ mobile phones. They can pick up their items anytime within the next 24 hours by entering their code into the locker, which then lets companies know they have been emptied.
Using smart lockers for deliveries, of course, is not a new concept. In the U.S., Amazon and Wal-mart have experimented with them, but the system failed to gain traction because most American consumers prefer the convenience of having their packages delivered to their doorstep.
Gururaj believes that India, however, is the perfect market for smart lockers.
“The traffic is worse here, the security problems are potentially worse, we need to consolidate more because the volume of deliveries and rate of growth is much higher,” he says.
In order to succeed, QikPod must make sure its lockers are easy to access, so shoppers won’t decide it’s ultimately preferable to sit around at home and wait for deliveries to show up. Over the next 18 months, QikPod wants to have at least 50,000 lockers installed in India’s 10 biggest cities. Guruaj says the company’s goal is to eventually have units within 100 meters of everyone in major cities, with lockers in large retailers, apartment buildings, ATM rooms, bus stops, gyms, and other highly-trafficked places.
QikPod will charge companies a per-use fee for each locker, which can be managed through an open platform and API. For e-commerce companies, Gururaj says the benefits of smart lockers include lower package loss rates, happier customers, and a higher return on their logistics costs. India’s top online sellers have already spent million of dollars into their delivery networks (for example, Snapdeal recently invested $20 million in logistics firm GoJavas) in an attempt to offer faster and more secure shipments than competitors.
“If you think about the time it takes to hand something to a consumer, if you call them two or three times en route, then call them once again to ask them to come down, then the amount of time each courier wastes is tremendous,” says Gururaj, adding that 15 to 35 percent of parcels need to be redelivered.
Once QikPod builds a solid network of trucks and lockers, it will explore other verticals, like grocery deliveries and dry cleaning pickups. Gururaj says adding new services will be relatively simple after tackling e-commerce logistics.
“If you can get e-commerce working well, then all other use cases will come into play with extensions.”