ShopClues
Logistics
SYNDICATE 3
Bambang Sugiharto
Bara Yohantomo
Bobby Mandala Putra
Cikita Tiara
Daniel Gani
Daniel Hasudungan Sibarani
What is ShopClues.com?
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Shopclues.com is India’s ‘Unicorns’ online marketplace.
Founded in Silicon Valley in July 2011.
A subsidiary of Clues Network Inc., a US based corporation.
Founded by Radhika Aggarwal & husband Sundeep Aggarwal, Sanjay Sethi.
Has around 1100+ employees with Headquarters in Gurgaon, India.
CEO of the company is Sanjay Sethi.
It has 30 million+ registered customers, 650,000+ merchants, 16 million+
products across 5000+ categories at attractive prices.
• 100 million+ monthly visitors, 7500+ brands, 8 million+ Facebook Fans
Main Page of shopclues.com
Top Online Marketplaces in India:
The Competitors
Leaders
.in
Others Local
Players
Source: indianonlineseller.com, nextwhatbusiness.com
Internal Factors
• It has 7,500+
national and
international brands.
• A large merchants
base comprising of
650,000+ merchants.
• It lists 16 million+
products across
5000+ categories.
• Products are shipped
to 12,000+ cities.
• Strong brand
recognition.
• Well managed
Reverse Logistic
System
S
• Relatively less brand
visibility in metros
in comparison to its
strong competitors.
• Limited market
share growth due to
intense competition
• Loyalty among
suppliers is low
• Business Model of
Shopclues.com can
be easily imitated
by the competitors
W
External Factors
• Expansion to other
countries
• Heavy promotion to
get more customers
in tier 2 and 3 cities.
• Expansion to other
product categories,
as customer
preferences are fast
changing
• Acquisition of
ecommerce portal to
strengthen their
positioning.
• Sale of private labels.
• Increasing customer
base in lower
segments
• Distrust of
company, its
technology, product
originality, etc
• Increased
competition from
ecommerce giants
like amazon,
flipkart, etc
• Heavy discounts
offered by offline
stores
• Growing
technological
expertise of local
players
O
T
What is Shapclues’s Operating Model?
• It is a business to consumer technology platform that connects Tier 1, Tier
2 and Tier 3 customers.
• It operates as an online marketplace that adopt a zero-inventory (managed
marketplace) model based in India.
• Shopclues charges 12% selling service fee on every successful transaction.
• Shopclues targets small businesses like retailers and shopkeepers and
encourages them to sell their stuff online.
• Shopclues also provide support to the sellers through helpline and emails.
• Shopclues provide an ultimate platform to small sellers to showcase and
sell their product all over India.
• Shopclues deliver products to over 30,000 PIN (postal index numbers).
How it is different from Others?
• Shopclues has wide range of merchants of their site.
• It has 16 million+ products whereas Snapdeal has only 10 million+.
• Sanjay Sethi, the CEO and Co-Founder said, “our main focus has always
been to have the highest selection of products and offer them at lowest
price”.
• Fast Delivery up to smaller cities and rural regions.
• Innovative Promotional & Marketing techniques.
• Shopclues does not charge any Subscription & Listing fee to the sellers.
• Focuses on unstructured products such as home and kitchen appliances,
small electronics.
• Target Market: Mainly Middle Class People with average age 26 years.
A WIND OF CHANGE
• ShopClues change its strategy to
outsourcing by third-party
logistics (3PL), which involved
using a combination of national
and regional partners. ShopClues
also shifted from an air mode to
an express surface mode of
transportation.
• 3PL partners included traditional
logistic services providers (LSPs),
e-commerce-focused logistics
providers, and India Post.
The benefits
Complete package.
3PL companies offer complete services from procurement,
storage, to packaging and delivery. With this, ShopClues can
reduce investment in logistics infrastructure.
Wider reach.
With 3PL companies, ShopClues can expand their reach to
include Tier 2 and Tier 3 cities, where Cash on Delivery
(COD) is preferred mode of transactions.
Ensure delivery time
With offering services as express/non-express road
transportation and route/delivery planning, 3PL can ensure
a clear delivery time.
Accountable.
With the help of real-time tracking and reliable
documentation, everything in the process becomes
accountable to both ShopClues and customers.
Special value-added services.
With the help of 3PL, ShopClues can offer special services that can
earn customer trust more, such as time-bound deliveries (same day
or next day deliveries), card (swipe) on delivery, and parcel lockers.
The Role of 3PL
• The role of 3PL partners become vital in the process from the
moment the customer’s order was placed and assigned a number.
• The DSS determine a suitable 3PL partner based on multiple factors
such as SLA for pickup, shipping, and last-mile delivery; SLA for return
to origin (RTO); and cost of RTO (for reverse orders).
• Then order-status flow to 3PL partner selected by the DSS through
pickup API.
• The 3PL partner need to make at least 3 order delivery attempts
before initiating an RTO (for reverse order).
Forward order Process flow using DSS
[Courier assignment optimization Model]
Order placed by customer
[Serviceability Check]
Calculation of serviceable courier partners (Current system)
Order
Fulfilment
DSS – [Elimination Rule Engine]
Courier elimination based on rules. Result = Final set of serviceable couriers post elimination
Courier assignment through DSS
Marketplace, 97%
Fulfillment center, 3%
Fulfillment
type of order
Basic
Premium
Orders manifested & packed by vendor
Milk run arranged by FC at vendor place
API Integration
Information flow to courier through Pickup API
Handover the consignment to assigned courier by
vendor – Order moved to HTC Stage by API
Milk run arranged by FC at vendor place
Order status updated as shipped
through connection API
Handover the shipment to assigned courier
Order status updated as delivered or
RTO through tracking API
Arrange RMA (Reverse pickup) from customer
under outsourced/Doorstep QC model
Arrange replacement or refund to the
customer basis the case requirement
YES
Post delivery
issues
NO
Order placed by customer
The Importance of Reverse Logistics
• To protect the customers interest, Shopclues has a well structured
return and replacement policy for products that were damaged,
unsatisfactory, or the wrong product.
• ShopClues provides ‘Doorstep-Quality-Check’ and ’Return-to-Seller’
services to its customers.
• ShopClues has a network of reverse 3PL partners for handling 4,000
reverse orders per day across 14,000 PIN codes.
• In a delivery process, 3PL is instructed to send back the product/RTO
to the seller after 3 unsuccessful delivery attempts.
Customer receive the product
Must be
within 10
days
Customer file a return request on the portal
Mismatched
Arrange to be sent
to merchant
Reason for return
Yes
Damaged
Cause of damage
classified as a merchant
or 3PL liability
Shopclues’s
Reverse
Material
Flow System
No
ShopClues confirm the refusal
from merchant or 3PL to
accept the product back
Arrange to be sent to
merchant or 3PL
Pick-up arrive to customers location
within 2 business days without additional fee from customers
Arrange to scrap the product
Reverse Material (Cont’d)
• In ShopClues, over 95 percent of customer who returned items
received refunds within 12 to 24 hours of pick-up.
• In special cases, such the cities that aren’t covered with reverse 3PL
services, the customers can do a self-shipment. The cost of the
couriers then can be reimburses in the form of ShopClues loyalty
points, or ‘Cluesbuck’.
What is the role of Technology
in Logistic Management of ShopClues?
• Shift from inventory model to marketplace model
• Task Automation, for faster logistic service with less cost and higher quality
• Online Tracking, giving information of the products being shipped (status,
location)
• ShopClues built a plug-and-play (system integration) technology platform
for real-time exchange of date between ShopClues portal and 3PLs,
facilitating effective communication.
• It help with demand management by allocating order volumes based on
partners’ capacities and past delivery performance.
• ShopClues also in the process of developing individual application program
interfaces (APIs) of different logistic partners.
CONCLUSIONS
• Shopclues follows a Marketplace model and zero-inventory led model
to reduce the cost reduction.
• They concentrated equally on the Reverse Logistics to achieve sky
level success by the help of 3PL logistics partners.
• Shopclues wants to increase it’s Just-in-Time concept and they want
to concentrate more on reverse logistics
Thank You!
India’s first and largest managed market place