Business-to- consumer B2 C or ecommerce last-mile logistics services will be an important factor in the long term, said Shashi Kiran Shetty, Founder and Chairman of Allcargo Group.
At some point, we will have to look at it ecommerce last mile because of the sustainability of customer stickiness point of view, but today we are not under pressure to do that, Shetty said in an interaction with Business Today on the sidelines of an event at the company's logistics park in the outskirts of Bangalore.
If we want to start B 2 C last mile today, I do not think it is a big issue because there are so many start-ups that can stitch it together for us as vendors. We have other priorities and we are thinking about all that. He said that we would look at more profit-making businesses rather than do something for the sake of doing it.
Shetty said the company is not keen on going into quick commerce logistics. We are not really excited about it, but we are not really excited about it. He added, "Let somebody else do it and we will figure out."
Shetty said Allcargo has set up a separate digital arm that is trying to get the company ready for digitally first and digitally ready globally. We have built a tech platform for customer acquisition and management of supply chain business. We want to be a first digitally-first organisation. Today, 60 per cent of our business is already online, he said.
He said that ecommerce will eventually comprise about 40 per cent of the company's warehousing business.
It is just a beginning. There are a long tail of companies looking to lease facilities, not only Amazon and Flipkart. As we speak, we are looking at five locations, including two properties in Bangalore, in Nelamangala we bought 100 acres and in Hoskote we already bought 35 acres, it will go to 75, Shetty said.
The company has already developed 100 acres in Farrukhnagar for the NCR region and a 35 acre facility in Hyderabad. It is currently building parks in Kolkata and Ahmedabad and is in land acquisition discussions in Patna and Kanpur. The Mumbai-based company aims to build 20 million square feet of warehouses in India over the next five years.
He spoke to BT from the company's logistics and warehousing facility, Malur Logistics Park, which is now fully occupied. The two million square feet park, spread over a 100 acre facility, houses sports retailer Decathlon and ecommerce players Flipkart and Amazon. Decathlon occupies 900,000 square feet of space, Flipkart occupies over 500,000 square feet and Amazon operates from 300,000 square feet in the logistics and warehousing park to manage their supply chain requirements.