As e-commerce is growing rapidly in Nepal, there are so many online stores – small and big; those selling services or products – some operating just on the social media platforms like Facebook and Instagram. This is however just the beginning. The growth rate is high and there will be thousands following suit especially after the COVID-19 pandemic.
With each industry booming, a new opportunity for business in developed. Similarly, with the e-commerce industry growing, there is a demand for logistics, shipping, and supply of goods. Not all online stores can afford to have a separate logistics or packaging department this is where logistics companies help in shipping their products to and fro for far better prices. Thus the growth prospects for Logistics startups in Nepal is exceedingly high.
By logistics, I don’t mean the shipment of products to your customers. There are a lot of factors that come under this header like cross-border trade. Nepal stands at 114th place out of 168 economies of the world in The Global Logistics Performance Index in 2019. If we truly want a developed a country, the way trading happens in Nepal has to be improved and improving logistics could be where we start.
Logistics supports the physical movement of goods through transportation, warehousing, brokerage, express delivery, terminal operations, information management, and other services. The efficiency of a country’s logistics is a key factor in a country’s trade opportunities.
Problems to be solved by Logistics startups in Nepal
Now, several models could be structured around this sector from the aggregation of trucks/mini-vans to providing warehouse services. Also, the model could be B2B or B2C as per the wish of the company.
The first one that you can think of is a business that provides a space to book trucks/mini-vans/two-wheelers to ensure the transportation of goods. Given the geography of Nepal, it takes a lot of time to transport goods from one place to another and it results in a longer transit time with inventory moving for a longer time. You as a startup should ensure faster, more efficient, and a cheaper solution. Technology in logistics startups in Nepal is yet to come; You can add real-time GPS tracking of the goods on road to ensure the safety and the ETA of the concerned goods.
Packaging of products for long and safe shipment might not be affordable for most businesses. You can easily tackle this need by providing specialised packaging services and even top it up with delivery of those products.
Branding and marketing is a very important task for all the business and just because your customers are business owners does not mean it will get any easier for you. Building trust with your partners is extremely important for your success in this space and promoting the logistics startups in Nepal.
Next up could be a purely shipping model that would take the products from the company and deliver it to customers within the country or throughout the world whatever seems fit. Global shipment can be a headache for most small businesses and as you start dealing with numerous clients and sending in bulk, your cost will decrease. However, to partner with global clients, having a strong national market share will come handy.
Warehousing is an extremely crucial part for companies, not all people can afford to rent or buy a warehouse to keep their products safe. Providing warehousing services for a weekly/ monthly/ yearly basis to businesses can help them considerably generating enough revenues for yourself. Storage of products that require special care or temperature-controlled storage could be a bit expensive to pull off in the early stages. Bootstrapping your way through a warehousing business might be a little difficult if you don’t already have a place you’re going to use as a warehouse.
Many businesses might just want to hire delivery personnel but do not want to go through the trouble of hiring and trainning them. You can provide well-trained delivery personnel to businesses charge your comission. This will help to cater the problem of unemployment too. Nepal is at a distant cry when it comes to women delivering products and it remains a male-centered profession. This could be a new step towards women empowerment.
However, many startups could be looking for a one stop single-source solution for their warehousing and distribution needs that is from storage to packaging and pick-up your material to send it to the destination. You could start with a single or few services and then scale up from there.
Hope this was a productive read. If you are new to the startup world, see Entrepreneurship from the very Basic here.