Logistics start-ups seek new routes to deliver revenues
Logistics start-ups are adding new services to serve traditional businesses to maintain revenue flow as their e-commerce clients struggle. Logistics service provider GoJavas, which counts more than 400 e-commerce companies as clients, and other start-ups such as Shadowfax Technologies?Pvt.?Ltd and Opinio (Moonshots Internet Pvt. Ltd), which generate close to half of their business from thin-margin food and grocery deliveries, are now exploring additional revenue through?partnerships?with?banks, reverse logistics companies and manufacturers to shore up revenue. Both Opinio and Shadowfax are also exploring additional revenue streams such as advertising to try and mitigate the impact of losses incurred by their core offerings, Mint reported on 30 March. Hyperlocal delivery start-ups have been struggling to build a sustainable business model because of poor unit economics, given that commission from merchants barely pays for the cost of delivery, which could be as high as Rs.60-70 per delivery. With the investors becoming increasingly cautious about pumping new funds into start-ups, these companies are seeking to conserve cash and shore up revenue. Even so, the attempt to diversify revenue streams will succeed only if logistics start-ups manage to keep their costs low, experts say.