Gati-Kintetsu Express Private Ltd. (GatiKWE) is a joint venture between Gati, India’s pioneer in express distribution and supply chain solutions, and Kintetsu World Express (KWE), Japan’s leading logistics provider that manages express distribution services. The JV manages the express distribution and supply chain of the group and accounts for 65% of the overall business.
Headquartered in Hyderabad, Gati was formed in 1989 as an express distribution service company. Starting its operations between Hyderabad and Chennai, Gati now operates 1600+ scheduled routes. The company has transformed by providing multiple services and solutions in the logistics and distribution sector, emerging as a market leader in several of its offerings.
E-commerce has been a significant game-changer in the business landscape of our country. The value proposition offered by e-commerce companies is immense, and Gati has played a pivotal role in ensuring deliveries to the last mile. It is one of the very few companies that have helped retail revolution become a reality in India, delivering products ordered online reliably to the consumers.
“As the industry evolves in the post-GST environment, Gati will command the advantages of competing in a larger market with opportunities for service innovation. In fact, Gati’s Vision 2020 is centered on providing end-to-end logistics solutions, tailor-made to customer specific needs. Our focus remains on improving customer experience, leveraging our network advantage and creating avenues toward long-term shareholder value”, says Mr. Mahendra Agarwal, Founder & CEO, Gati.
Gati today delivers across 99% districts in India, with a strong presence in the Asia Pacific region and SAARC countries as well. With an integrated technological system network across air, rail and road platform, a nation-wide warehouse presence, complete e-commerce logistics, integrated cold chain solutions and trading solutions, it is able to provide end-to-end supply chain solutions to millions of customers. Since 2014, Gati has accelerated its service delivery, currently handling 70,000 packages per day.
Robust growth
During FY17, at a consolidated level, Gati achieved a revenue of Rs. 17,041 million against Rs. 16,818 million in the previous year.
Gati e-Connect, the e-Commerce division, registered a package volume growth of 14% between FY2015-16 and FY2016-17, with substantial share of growth (in excess of 50%) coming in the lower-weight segment. Presently, this division has built a capacity to deliver more than 80,000 packages per day.
During the year under review, Gati e-Connect has recorded a revenue of INR 2,140 million as against INR 2,078 million in the previous period. While demonitisation reforms during the second half of FY2017 negatively affected the COD packages, the move has given an unprecedented push to online transactions, with the Government itself advocating a move towards a digital, cashless economy.
More recent growth forecasts for the domestic e-Commerce market point to a CAGR of around 30% over the next five years. The moderated growth indicates signs of maturity in the industry, moving from a period of frenzied valuation towards a more sustainable market ecosystem. The e-commerce industry, nevertheless, continues to be the most exciting and fastest growing, domestically.
Business strategy
Over the last few years, the company has undertaken significant initiatives to fortify its stronghold to deliver consistently to customers, by developing end-to-end solutions, enhancing technology capabilities and augmenting operations quality processes. These strategies are based on the fundamental premise that customers will continue to seek a larger role of logistics service providers like Gati who can integrate their unique supply chain requirements. The recent portfolio enhancement with the launch of Gati Fulfilment Services and commissioning of cold chain warehouses are reflective of this very perspective.
The Gati fulfillment service is a new service where it goes direct to the vendor to offer opportunity to them to use the service and use the same inventory across market places. It aims to provide a end-to-end ecommerce solution for online sellers and enterprises right from catalog creation, central inventory management to complete physically integrated supply chain solutions. Within the ambit of Fulfilment centre, the company provides services, including but not limited to site identification, designing appropriate warehouse layout, installing ideal racking solutions and finally managing both information and product flow.
Full-fledged fulfillment centers at strategic locations across India are now operational. With GST implemented now, Gati has intensified its customer engagement efforts to provide customised integrated logistics solutions. This is a significant opportunity in the coming days.
As for the core express distribution business, the company is committed to maintaining its pan-India network and service leadership, in the post-GST environment. Specific medium to long-term changes in domestic supply chains like consolidation of customer warehouses will necessitate improvement in service levels to areas outside the major metropolitan centres. Additionally, Gati is expanding its portfolio of multi-modal distribution and warehousing solutions, offering customers more customisation in serving their emerging needs.
With the launch of its ambitious Shop-Floor Automation (SFA) initiative in early FY2017, Gati has reached a vital milestone. This package-level visibility through 100% Bar Code scanning is unprecedented in the domestic express distribution sector, especially in the context of Gati’s scale and reach. With all the complexities, the undertaking took time to stabilise and the management is happy to report that the automation is fully-implemented with a positive impact on customer experience and productivity. Going forward, Gati will continue to advance such technology interventions to provide operational scalability, cost optimisation and service improvement needed to support future growth opportunities and enhance profitability.
In November 2016, the company invested in BrownTape, a technology platform that helps online sellers on multiple e-Commerce marketplaces to manage their orders from a single window. The alliance will work on the vision of simplifying e-commerce for all levels (small, medium, and large) of online sellers, who will be able to manage their e-commerce ecosystem seamlessly.
To gain further penetration into consumer retail, Gati is also developing solutions that integrate the online and offline shopping channels available to consumers. The strategy leverages the company’s competitive edge on account of its experience in handling both Business-to-Consumer and Business-to-Business channel logistics, and will result in longer and more profitable business relationship with customers.
Express logistics
Express distribution is time sensitive movement of commercial packages on the door-to-door delivery concept, and Gati is a pioneer in developing this concept in India more than 25 years back. This division of Gati is the most preferred Express Distribution and Supply Chain Solutions provider because of its ability to handle every distribution need of its customer. An intrinsic network that spans the length and breadth of India Gati-KWE has a reach of more than 99% of the districts in India. A large fleet of more than 5,000 vehicles and an assured space across 32 airline sectors ensure that all couriers, cargos and shipments are delivered in time at the right place.
Express distribution division of GATI has over 5000 clients from industry sectors such as pharma, FMCG, engineering, auto ancillary, textiles & IT hardware.
Cold chain logistics
Gati Kausar is a subsidiary and cold-chain arm of India’s logistics giant Gati Ltd. It is the longest established cold-chain company in India, with 30 years of expertise in the cold-chain distribution business. Gati Kausar offers customised solutions for temperature sensitive shipments, including consumer foods, pharmaceuticals, retail and agri-food sectors. Its innovative cold-chain transportation solution, strengthened by cutting edge technology and a vast fleet of refrigerated vehicles equipped with advanced climate-control systems, ensures that perishable products are delivered in a fresh, healthy and potent state to retailers and end consumers.
Its state-of-the-art modern refrigerated units, established reefer network, temperature-controlled vehicles, IT infrastructure and experienced team helps them offer the right solution for every customer need.
Gati also offers 3PL & warehousing solutions, freight forwarding & trading solutions, import / export & trading through Gati Import Export Trading Ltd. (GIETL) and international freight forwarding and logistics services through its global wing Gati international.