Parcel delivery arena heats up as Uber makes its grand entry

Uber seemed to have had another trick up its sleeve when it announced last month that it was shutting down its highly popular food delivery arm, Uber Eats, in Bangladesh from June 2.

It turns out the San Francisco-based tech giant was pivoting to package delivery, a service whose demand saw a huge leap as the pandemic enforced switch to online shopping.

The company yesterday announced the rollout of its new service Uber Connect, which would enable residents in Dhaka to send and receive parcels from each other and also order items from shops within city limits.

Uber's entry into this arena comes at a time when e-commerce platforms and courier services providers are grappling with swelling orders and are failing to deliver products to customer's doorstep because of ill-preparedness, obstacles on commuting goods and adequate service personals.

"We are thrilled to be launching Uber Connect, which will help users send and receive essential items to their friends and family or order items from shops during this crisis, without having to step out of their homes," said Ratul Ghosh, head of Uber for Bangladesh and East India.

The new service also means the thousands of drivers who have left without income for more than two-and-a-half months now for the government's reluctance to allow ride-hailing service providers back on the roads would be able to find a new source of living.

"Uber Connect is a prime example of how we are adapting our platform to meet the needs of our communities, which still need to practice social distancing in these challenging times. This is also an extension of our ongoing efforts to provide driver-partners with new earning opportunities," Ghosh added.

All packages should be transportable on a two-wheeler vehicle, be under 5 kilograms in weight, securely sealed and not include prohibited items such as alcohol, recreational drugs, or dangerous and illegal items.

The new delivery service can only be used for transporting goods and not ferrying passengers.

Similar to on-demand trips, customers will be able to continue monitoring the trip's progress before pick-up, en route and at the drop-off point, Uber said in a statement.  

Customers can also share the delivery status with the recipient of the package.

Uber though would face serious competition from its top rival in Bangladesh Pathao, which introduced parcel delivery service in 2017.

Pathao is the market leader of the on-demand package delivery category in Bangladesh and has its footprint in the port city Chattogram too.

"Our orders have increased significantly since the lockdown began," said Sayeda Nabila Mahabub, director for marketing and public relations at Pathao.

Another rival Shohoz, which provides on-demand and offline truck service alongside ridesharing and food delivery services, is also gearing up to introduce such service.

"We are observing the opportunities and considering launching it since we already have both long-haul and last-mile logistics," Maliha M Quadir, managing director of Shohoz, told The Daily Star yesterday.    

For the last few years, logistics companies have been experiencing enormous growth thanks to people's appetite for shopping and consuming food and beverage from the convenience of one's home.

Before the pandemic, logistics companies used to make about 1 lakh home deliveries daily, of which 30,000 were food deliveries, according to industry insiders.

Including e-commerce and f-commerce, the number of deliveries made by logistics companies would now be more than 1.5 lakh, said Biplob Ghosh Rahul, chief executive officer of eCourier, a leading logistic provider.

The number of daily deliveries that eCourier makes per day in Dhaka is about 8,000, up from 5,000 before the pandemic.

Even before the pandemic, the e-commerce and f-commerce businesses were thriving, so did the logistics business, he said.

"What China was in 2009-10, we are now in that position in terms of home delivery services. The delivery services would continue to increase."

But the pandemic appears to have turbocharged online shopping.

"While the delivery of clothing dropped, the orders for daily essentials, masks, gloves and personal protective equipment have increased," Rahul said, adding that eCourier makes about 3,000 deliveries outside of Dhaka a day too.

Logistics companies with particular focus on making deliveries outside of Dhaka though received a serious blow from late March through to June because of the restriction on the movement of goods for long-haul destinations after the government put in place a countrywide shutdown to stop the spread of the deadly virus.

The number of deliveries of Paperfly, an e-commerce-based logistic company, fell to 10 per cent during the time.

"At that time, we even could not move our goods to most of the districts," said Rahath Ahmed, chief marketing officer of the company.

Before the pandemic, it used to make about 10,000 deliveries a day.

The business scenario started to change for the better after the government eased restrictions at the beginning of June. Now, Paperfly makes about 7,000 deliveries per day.

Paperfly has set foot in almost every union in Bangladesh and made 28 lakh deliveries since its inception in February 2016.

The company had faced mainly two types of problems during the lockdown: first, there was difficulty in delivering products to customers because of a lack of transport. Second, there was a shortage of workforce as many of its deliverymen left jobs fearing infection.

"In many cases, our delivery persons had to walk several kilometres to drop off the product," Ahmed said.

Customers often misbehave if the delivery is not made within 2-3 days, whereas e-commerce platforms from where they avail the products inform them that the delivery would take seven days.

"They need to be a little sympathetic of the crisis we are facing," he added.

Despite challenges, logistics platforms in Bangladesh have a bright future ahead, according to industry insiders.

And Daraz, a subsidiary Chinese e-commerce giant Alibaba, appears to be taking preparation for that.

The company recently announced plans to invest Tk 500 crore in Bangladesh by 2021 to set up logistics infrastructure and hubs that would help expand its footprint to all 64 districts.

Besides, many brick-and-mortar stores and fast-moving consumer goods brands are partnering with e-commerce platforms to make their products easily available to consumers.

For instance, global skincare brand Nivea has recently partnered with multiple e-commerce platforms to keep its supply chains moving to get closer to its consumers even if they are confined to their homes.