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Abstract

Papers N Parcels (hereafter PnP) is an end-to-end logistics business organization founded in 2018 by Tilak Mehta, who was a teenager at the time. The capital that supported the initial activity of the company was derived from family investments. The company has an efficient business model and gains a competitive advantage by setting up its primary objectives and strategies, which position it for success. PnP aims to deliver its products within 4–8 h of an order, which is the fastest rate among existing delivery companies. The parcels are picked up from the end customers and delivered to the recipient company’s main hub. From there, the parcel is sent to the final recipient with the help of the PnP app. This approach streamlines the process, and the time involved is very minimal. The business model of this fast-moving company was new and unique. The case study highlights how effectively PnP capitalizes on the vast network of dabbawalas (lunchbox deliverymen) in Mumbai who use the PnP app.

Keywords

Papers N Parcels India mobile app competitiveness entrepreneurship

Introduction

In 2020, the courier, express, and parcel (CEP) market reached a volume of 2.8 billion pieces in India. This number represented a very large increase from the previous year, with a compound annual growth rate (CAGR) of over 59%. The lockdowns introduced due to the coronavirus pandemic have accelerated the e-commerce segment of business-to-consumer (B2C) e-commerce and boosted the CEP sector (Statista, 2022). The CEP market in India is estimated to be growing at a CAGR of more than 10.5%, driven by the growth of e-commerce, higher Internet penetration, and recent technological innovations in the sector (Mordor Intelligence, 2022). India has experienced a significant increase in parcel volume; for example, in 2018, parcel volume was up 21% year-over-year, to 2.5 billion. The revenue generated by the domestic CEP market amounted to USD 3.14 billion at the start of 2019, which is approximately 73% of the total revenue generated by the Indian CEP market. The remaining percentage of revenue generated was mostly due to the rise of e-commerce sector, which boosted the Indian CEP market. The domestic CEP market is likely to experience continued growth and holds the majority share during the forecast period of 2022–2027, driven by the B2C e-commerce boom. Digitizing the economy and providing inexpensive Internet to the majority of Indian residents have boosted the growth of digital sales in India. In 2018, e-commerce sales across India were estimated to have increased by 25% as compared to the previous year (Mordor Intelligence, 2022).

Papers N Parcels

Backdrop

“High school students also make great entrepreneurs because of their natural open-mindedness and drive to take risks. Teenagers have the capacity to dream outside the realm of their experiences. They are willing and eager to test limits and experiment; developmentally, they are not afflicted with the I-should-know-better-than-to-try-this effect.”

Jindal (2019). Teenage Business. Think India Journal, 22(14), p. 320

Sixteen-years-old Tilak Mehta, hereafter Tilak, was visiting his uncle when he realized he had forgotten his math textbook, which he needed to study for an examination. At the time, the Indian teenager was a student at the Garodia International School, located in Mumbai.¹ Considering the urgency of the situation, Tilak requested that his father bring the book to his uncle’s house. However, his father was busy and could not bring the book to him. In the end, Tilak used a courier services that charged INR 300 (USD 3.88) for the same-day delivery. The service charge was equivalent to the cost of the book. Tilak instantly realized the need for a reasonable delivery service company in Mumbai, which led to the idea of establishing Papers N Parcels (PnP). He was inspired by the business strategies of the dabbawalas, who pick up and deliver home-cooked food. Customers can access this system through a phone app.

Inception

Papers N Parcels was founded by Tilak Mehta in 2018. The capital that helped establish the business was initially provided by Tilak’s family investments. The main aim of PnP is to meet the demands of their customers, who require same-day delivery and have limited financial resources. Primarily dependent on a mobile application, PnP delivers critical documents, personal belongings, medicine, pathology report, and clothing using the famous dabbawalas (a lunchbox delivery and return system that delivers hot lunches from homes and restaurants to people at work in Mumbai, India). This young entrepreneur has managed to grab a significant share of the market with his innovative idea and cost-effectiveness (Shah, 2018). The team is currently comprised of Ghanshyam Parekh, as the chief executive officer (CEO); Vaishali Nandu, as the project coordinator; and Jignesh Brahmakhtri, as the chief technology officer (CTO). This business was completely self-funded, having more than 200 employees and 300 dabbawalas connected. All their hard labor is used by PnP to deliver up to 1200 items daily at a rate of INR 40 to INR 180 (Shukla, 2020). Papers N Parcels aims to complete delivery within 4–8 h, which is the fastest speed among existing delivery companies. The parcels are picked up from the end customers and delivered to the recipient company’s main hub. From there, a parcel is sent to the final recipient with the help of the PnP app. This streamlines the process and makes it less time consuming.

Networking through mobile app

In India, integrated end-to-end logistics solutions are now needed. Papers N Parcels has already proven to be an efficient point-to-point delivery service through mobile apps. Papers N Parcels capitalizes on the vast network of dabbawalas in Mumbai whom they have equipped with Android phones loaded with the PnP app. Dabbawalas is the most reliable delivery service in Mumbai. In fact, PnP reformed the structure of the dabbawalas, which means that the white squad (white uniform/dress) are equipped with Android phones that include the PnP app. Users are required to install the PnP app from either the Google Play Store or the Appstore. Then, as the app collects the user’s geo-location, they must arrange a pick-up of their package at one of the three offered time slots. Next, the dabbawalas receive notification of the order and pick up the package from the shipper’s doorstep to deliver it at the receiver’s central hub. From there, the parcel is sent to its final destination. People can track their packages as they travel through the city, from pick-up to drop-off. The app is fairly straightforward, and PnP has also created a dedicated customer service helpline. For proof of identification, the contact information and picture of the delivery person will be sent to the receiver (Advice 4 u, 2019). This cuts down on lengthy logistics, and the app-based service promises to optimize time use and streamline the delivery process (Shah, 2018). The PnP wallet can be refilled directly from Paytm², providing for easy payment options.

Business strategy

Tilak saw a gap in the logistics market of India after facing difficulty related to a dearth of same-day delivery services and the high price rates of such (Bisht, 2020). At that moment, he decided to fill this gap by designing an app that would help people quickly and easily deliver their parcels. He divided the whole of Mumbai into 63 circles in order to increase effectiveness and efficiency, targeting fast delivery. Tilak placed three to four dabbawalas, who had a range of 5 km, in each of the circles, which would allow one dabbawala to transfer the parcel to another and so on, with less movement (Garg, 2019). Customers enjoy cost benefits because PnP provides one-hub services to sort their parcels. Thus, the costs are as low as INR 45 to INR 50. This is only one-fourth of the cost of other courier-related services in India. Such cost-effective methods lead to lower prices for customers, who do not want to be charged higher prices to deliver small packages. Thus, PnP garnered a positive response from customers. The reviews received highlight PnP’s affordable rates. The unique selling point (USP) on which PnP is based is a one-day delivery system; that is, the product will be delivered within a day of its pick-up time. Also, no other courier company offers the option to engage a courier until 2.30 p.m. and receive delivery on the same day without any commitment or contract at such low prices.

Competitiveness

Papers N Parcels is the pioneer of “uberising” door-to-door delivery, thus enjoying strengths in many respects. The ability to provide the same-day delivery of parcels at an average of 4–8 h at INR 40 to INR 180 is difficult to beat (Joshi, 2020). The connection with the dabbawalas and strictly verified PnP experts makes PnP reliable (Malik, 2018). Moreover, PnP showcases the use of the latest technology in the form of its user-friendly interface, method of payment acceptance and real-time tracking features. It is business-to-business (B2B), B2C, and customer-to-customer (C2C) business places at the forefront of courier service (Malik, 2018). Vishal Mehta’s logistics company, Rushabh Sealink, and internal fund borrowing provide an edge to PnP. The financial background of Tilak’s uncle is also an intellectual asset. Brand loyalty toward PnP grows as Tilak continues to receive recognition in the form of Global Child Prodigy (GCP)³, Ted Talks, and Forbes. Moreover, the connection with the dabbawalas increases faith on the part of customers. Payment is on a per-parcel-basis; thus, the more parcels delivered, the more the payment will be. This allows PnP to control its variable cost. Moreover, PnP only has one hub for sorting its packages, which results in a reduction of fixed costs as well (Advice 4 u, 2019). Socially conscious customers approve of this service because of its creation of jobs in India and reduction of pollution through the use of bicycles (Malik, 2018).

Competition

The market is highly competitive and fragmented. Being a small startup, obviously, PnP is bound to face tough competition from all the giants of the Indian door-to-door courier service industry. Established companies include Blue Dart Express, DotZot, Gati Ltd., Shiprocket, FedEx, and DHL, and because of the pandemic, the courier service industry took a nose dive in the beginning of 2020. To develop a better idea of the competitive issues surrounding PnP, it is important to consider other logistics organizations. The industry is extremely competitive and becoming increasingly complicated given all the changes in the contemporary world. Compared to other organizations, PnP is a very small startup focusing only on a single city.

Blue Dart Express is one of the major players in the national logistics industry. It operates in over 35,000 locations across India. It implements very advanced state-of-the-art technology in its operations. It offers both B2B and B2C services. This company has set itself apart with its fast and vast service network.

DotZot is a logistics company that offers next-day delivery services. It operates in over 10,000 locations across the major cities of India. It offers its services as part of various plans, such as premium, express, and economy, depending on the size, urgency, and required date of delivery. It has a very impressive network, with very close pick-up points to their customers in all the cities in which it operates. Gati Ltd. has a strong presence across the southern part of Asia, mainly in India. It provides not only delivery services but also other logistical and supply chain solutions to its customers, which are sometimes complimentary. It offers special services for art pieces and has premium and student-focused services.

Shiprocket is the leading logistic service provider in India. It operates in over 29,000 locations across India, and with its various courier partners, Shiprocket has established themselves as the leader in the industry in India.

Moreover, there are delivery applications (pick-up and drop orders/parcels), such as Pidge, Saral, and Lalamove India, that provide hyper-local delivery services in India. Their operations are completely automated using advanced technological solutions. Their platform uses a machine-learning-based data engine to identify an appropriate courier service for a business, select a courier firm, print shipping labels, and track orders all from a single panel, allowing businesses to handle their shipping and returns efficiently. They also offer the maximum amount of insurance coverage. They offer all these impressive services at a very low rate, making them a favorite among customers.

Setbacks and challenges

Papers N Parcels is centered in Mumbai, leaving the rest of India deprived of its services and giving room to competitors. PnP was previously family owned and funded, which meant Tilak relied heavily on his father for funding. Thus, he was under constant pressure because his investor father was constantly watching him (Singh, 2020). PnP is also reliant on Internet infrastructure, with the mobile application being prone to crashes. This requires constant updating and dependence on the IT department. PnP also relies heavily on a single hub, unlike competitors with multiple hubs (Malik, 2018). Furthermore, the weight constraint of 3 kg is causing a decline in revenue. India is subject to political unrest and no stranger to traffic. International and domestic competition in the same-day-delivery market is growing as well, especially given apps such as Wefast, Dunzo, SARAL, Pidge, and Lalamove India. Some of these apps even offer free delivery, subscriptions, and access to more regions, which make them more desirable (Tech Geek, 2020). There is also a lack of control of the dabbawalas on the part of PnP, and to add to the struggle, the COVID-19 pandemic is causing platform loss. “If we were still operating during this pandemic, we would have [taken] a big hit,” said a relieved Mehta, who was recently hired by a multinational corporation (Bisht, 2020).

Moving forward

The online delivery service in India alone will grow almost 28.5% within the next 5 years because it is going through a revolutionary phase. Hence, the market has shown huge response and attracted good investors. PnP has opportunities for expansion across India to large metropolitan areas, allowing for a broader clientele. A target of INR 10 billion in revenue in 2020 and 2021, with at least 100 thousand deliveries per day, was provided by Ghanshyam Parekh, CEO of PnP (Dutta, 2019). In addition, because PnP will need more funding for expansion, engaging in a partnership or merging with large companies could allow for good financial stability and help prevent losses. The aim of cutting costs by transferring to delivery-based payment instead of a predetermined rate was also mentioned. Mehta also targeted a 20% partnership with the inner-city logistics market in Mumbai and strategic connections with companies such as Swiggy, given synergy. A potential acquisition of dabbawalas would also mean growth in the revenue model (Singh, 2020). Moreover, PnP also plans to expand into areas including Delhi, Hyderabad, Bangalore, Kolkata, and Chennai in the next 2 years.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article. This project received financial support from InterResearch, Bashundhara, Dhaka, Bangladesh

ORCID iD

Jashim U Ahmed

Notes

Author biographies

Jashim Uddin Ahmed, PhD is a Professor and Chair of the Department of Management, School of Business & Economics, North South University, Bangladesh. He is the founder of InterResearch, a leading research organization in Bangladesh. He has been awarded his PhD in Management Sciences from the University of Manchester Institute of Science and Technology (UMIST, currently known as The University of Manchester), UK. He has achieved Master degrees both in Marketing and Management from the University of Northumbria, UK. He also studied in the University of Reading and the University of Lincolnshire and Humberside, UK. His research interests include social innovation, higher education, strategic management, and contemporary issues in marketing and management. He has published over 140 research articles and business case studies in reputed journals. He can be reached at: jashim.ahmed@northsouth.edu, jashimahmed@hotmail.com

Asma Ahmed is a freelance strategic planner in Bangladesh. Her Master’s degree and Bachelor’s degrees are from National University of Bangladesh. Her research interests are in the area of social innovation, intellectual and human capita, higher education, and strategic management. Currently, she is a research associate with InterResearch, Dhaka, Bangladesh.

Anisur R. Faroque, D.Sc. (Finland), PhD (New Zealand), is an associate professor (tenure track) in the School of Marketing and Communication at the University of Vaasa. Dr. Anisur has many years of teaching experience along with administrative responsibilities as the Head of the Department and Chairperson of various committees at the department and school levels. Having teaching and research experience in four different countries in Europe, Asia, and Oceania endows him with cross-cultural literacy and the understanding of the unique needs of diverse students. His research interests are in the marketing, international business and entrepreneurship domains, and include opportunity recognition, market orientation, entrepreneurial orientation, internationalization, networks and cognitive heuristics and biases in decision making. His research has been published in journals such as Industrial Marketing Management, International Business Review, International Marketing Review, Journal of Business Research, Journal of Marketing Theory and Practice, Journal of Business & Industrial Marketing, Asia Pacific Journal of Marketing & Logistics, International Journal of Entrepreneurship and Small Business, International Journal of Emerging Markets, and International Review of Entrepreneurship, among others.

Kaniz Fatema is the CEO of Bangladesh Open Source Network. She has worked in the telecom sector for more than a decade. She received her bachelor’s degree in Business Administration from Janahangirnagar University and completed MBA from North South University, Bangladesh. Her research interest includes women entrepreneurship, girls’ participation in ICT and STEM education, policy and practice, mitigation of socio-economic problems using innovation and technology.

References

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Papers N Parcels: Fill the gap by an app–teenager created initiatives in courier service