CHENNAI: When two distinguished people from different fields decide to collaborate, the results can be exceptional. The same is true of Connect India, the brainchild of LR Sridhar, popularly known as LRS in the logistics business, and social entrepreneur Vijay Mahajan, who is widely known as the father of rural livelihood promotion and microfinance in India.
They got together to establish Connect India with a vision to link rural India to urban India with logistics capability and create a Last Mile Distribution Platform that will enable a unique two-way logistics platform not to just provide urban products to rural consumers but also rural produce to urban India and to international markets. It was officially launched in September 2015 after an initial pilot with the likes of Amazon and Flipkart.
“When you work with communities, businesses rarely fail,” said Sridhar. “My dream is to create half-a-million jobs. I want to create entrepreneurs and empower the existing local entrepreneurs by bringing the business at their doorstep. The rural economy is the next big thing. In the next 10 years, the entire demand is going to be from the rural market so it is essential to have such a logistics system in place that caters to not only delivering products to the local market but also providing them with access to the urban and global market.”
He went on to explain that the objective is not only last-mile delivery but rural to export (RE)-commerce origination by creating a high reliability yet affordable logistics platform and providing rural producers with access to distant markets and in the process, reduce the dependence on middlemen. This would also mean introducing small farmers and craftsmen to being adept with receiving orders and payments on their mobile phones.
However, there are a number of challenges that come with last-mile delivery too.
“There are too many players in the system,” he said. “There is absolutely no consolidation. What I’m proposing is that instead of four delivery boys from different companies delivering a package in the same pin code individually, all four companies can drop off packages at our centre and we do the last-mile delivery for all four companies. It saves time and resources and works out to be far more economical for everyone.”
There is also a lot of disruption taking place in the system. Drone delivery is one of the topics that is discussed extensively by people in the sector, but Sridhar believes there is still time for that to catch up in India.
“Disruption is taking place in the logistics industry at a rapid pace, but I think it is too early for us to see drone delivery catching up in India,” he said. “There are several reasons for that, the primary one being that there are a lot of restrictions in place for their usage. We are building an enterprise that is based on optimisation and rationalisation. We are trying to cut the layers off that make products expensive. As a result of us doing bulk deliveries, the cost of delivery will come down to the customer too. India is muddled with middlemen and we are trying to eliminate them by doing everything digitally which is beneficial for all.”
One of the pillars of the Connect India model is brick and mortar stores. “This is a big boon for brick and mortar stores especially with the aggressive growth that is happening in the e-tailing business which is also impacting the small retail stores business,” he said.
“The Connect India model is complementing rather than competing to create local employment. In the next three to five years, Connect India will create a network eco-system of over 1,00,000 entrepreneurs connecting every single village in the country touching 26,000+ pin codes, thus creating over 5,00,000 jobs.”