What E-commerce Companies Need to Gear up for the Next Phase of Growth?
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
With the push for smart technologies and high speed internet, 40% of India’s population are active internet users. According to an industry research, internet users in India are expected to increase from 481 million as of December 2017 to 829 million by 2021. This advancement is proactively being leveraged by e-commerce companies that are delivering around 3.5 million packages per day as of today. Further, investments by e-commerce companies and the expansion of technological solutions provided by them is only going to raise this number, which is expected to cross the 10 million mark by 2020.
The Success Story
The huge success that the sector sees during every sale, festive days, weekends and special discount days have always broken the previous records. This has encouraged investors to pump in more and more money to the Indian market to expand inventory and operations. E-commerce companies have slowly re-aligned their business goals to include the Tier 2 and Tier 3 cities of India, that have been more than welcoming to the discounts and services provided by them. The markets have proven that these approaches are indeed true game changers and brought in a change in the usual buying patterns.
In spite of all this e-commerce companies are now facing issues. As they enter into this new phase, productivity is the new mantra. With this expansion of ecommerce companies, making their workforce more productive is a growing concern. Another challenge that comes with scale is lethargy and complacency, which directly hits the performance of the company.
Another aspect the ecommerce companies need to resolve is bridging the communication gap with its employees. There needs to be a very clear indication of what the employer is offering and what more can be earned by leveraging various incentives provided. While currently the employees work on the basis of the pay per delivery model, this incentive driven performance creates some ambiguity and will always have a transparency challenge.
While, e-commerce companies are promoting this concept believing it to be a productive tool and not realizing that this will further lead to higher attrition rates. It further gives no predictability of income for its employees. Even though the delivery boys are getting paid more than what they would get before; it is only because of the incentives that these companies offer them. The salary on paper without the incentives is close to the minimum wages. E-commerce companies should tie up with partners having experiences in managing this challenge.
The right staffing partner ensures to stay connected with the employees and communicates with them on various aspects of the job which is extremely crucial given the high stress jobs that delivery staff members have to perform. Staffing companies also create a layer between employees and companies and handles queries, complaints and any resistance that exists. In fact, the models like Pay Per Delivery that companies run don’t provide their employees statutory benefits like wages, PF, ESIC etc. Staffing partners have this expertise and adhere to such norms.
What e-commerce companies should look into is, finding ways to include capabilities and the scope for improving skills. Learning services will be beneficial to all its employees and this will directly benefit the e-commerce players, as this will increase the overall productivity. Other than that, it will also push the employees to take up more challenges and initiatives, thereby addressing the issues that e-commerce companies face in terms of attrition. It will also act as a very good retention tool in a time where more and more e-commerce companies are setting base and offering competitive incentives to attract talent. These delivery boys tend to switch to a better paying gig as the job is the same, but if an e-commerce player can offer them a holistic value to their careers, nobody would quit.
While the last 5 years have been a great run for all e-commerce players who have recorded an exponential growth in the business these basic initiatives will help ecommerce companies not only manage their productivity issues but will help in restricting the attrition rates which is quite prevalent in the sector.