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Ship Rocket started as a Shopify for India, but soon realized that replicating Western business models in India introduced unexpected challenges. They pivoted to become an e-commerce logistics aggregator, addressing the underlying infrastructure gaps that hindered the success of Western models in India. Ship Rocket focuses on building native India use cases by understanding the needs of micro SMEs and providing them with a toolkit for successful e-commerce. By catering to the unique demands of the Indian market, Ship Rocket has become one of the fastest-growing technology companies in India.
Ship Rocket faced multiple challenges in the Indian market, including the lack of offline integration for payments and shipping, the difficulty of digitizing catalog management, and the high rate of cash on delivery (COD) orders resulting in high return rates. To overcome these challenges, Ship Rocket developed innovative solutions. They partnered with offline payment and shipping providers to bridge the gap and create a seamless e-commerce experience. Ship Rocket also implemented a prepaid wallet system to ensure payment collection upfront. Additionally, they focused on addressing the high rate of return to origin (RTO) by leveraging data intelligence, optimizing carrier selection, and providing interventions to merchants regarding delivery feasibility.
Ship Rocket’s success lies in building bottoms-up native infrastructure for the long tail merchant segment in India. By integrating with various players in the ecosystem, including payment providers, shopping cart platforms, marketplace platforms, inventory management systems, and logistics partners, Ship Rocket offers a comprehensive operating system from order placement to delivery. Their software and intelligence engine enable them to serve the unique needs of the long tail merchants, providing them with tools to optimize their e-commerce operations and reduce return rates. Ship Rocket has become a central utility within the ecosystem, aggregating demand and leveraging its scale to make partnerships with insurance companies, carriers, warehouses, and more.
Shiprocket's success was attributed to their focus on serving the long tail of merchants and providing them with tailored services and support. By automating onboarding and support, as well as offering a wide range of carriers and services, Shiprocket was able to control pricing, drive higher margins, and ensure a seamless experience for their merchants. This targeted approach allowed them to achieve exceptional conversion rates and cohort growth, demonstrating the importance of building for a specific user segment.
India's fragmented carrier landscape and lack of standardized APIs and workflows presented challenges for merchants in shipping their products. Shiprocket addressed these challenges by initially focusing on providing access to carriers for smaller merchants. However, as they expanded to serve larger merchants, they adopted a three-pronged approach of API integrations, standardization of processes, and providing a wide breadth of carrier options. By streamlining the shipping process, offering quality metrics and intelligent recommendations, and resolving issues, Shiprocket was able to facilitate seamless shipping experiences for their merchants and prove the sustainability of their courier aggregation business model.
Today, we are running a bonus Business Breakdown borrowed from the newest Colossus series, Return on India. Saahil Goel, founder of Shiprocket, joins Romeen Sheth to break down the business. If you enjoy this episode and would like to learn more about the Indian business landscape, subscribe to Return on India.
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My guest today is Saahil Goel, founder and CEO of Shiprocket. Over the last decade, a number of startups that have reached escape velocity in India have followed the X for Y startup model. They've taken influence from something that works in the US and western markets and applied it to India. The next generation of winners will build Native India use cases, and Shiprocket is a perfect example. The business started out as Shopify for India and eventually pivoted to an e-commerce logistics aggregator when they realized the underlying infrastructure that made Shopify successful in the west didn't exist in India.
Fast forward, and Shiprocket is one of the fastest-growing and most well-positioned technology companies in India today. We unpack how to build for India, from India, how to capture value from India's long tail merchant segment, which is over 60 million businesses, and the common headline pitfalls investors fall into when evaluating startups in India. Please enjoy my conversation with Saahil Goel.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Return On India is a property of Colossus, LLC. For more episodes of Return On India, visit joincolossus.com/episodes.
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Follow us on Twitter: @RomeenSheth | @joincolossus
Show Notes
[00:02:47] - [First question] - The first iteration of Shiprocket back in 2012 called KartRocket
[00:08:26] - What drove the pivot from KartRocket to Shiprocket
[00:12:13] - Examples of why US eCommerce models just don’t take off in India
[00:19:28] - The challenges of building businesses for consumers outside of India
[00:25:54] - Courrier aggregation and capturing value in this type of business model
[00:31:22] - Why the large pre-existing couriers aren’t attacking this space successfully
[00:34:35] - Unpacking what RTO is and its scale and challenges specifically in India
[00:39:56] - How software and intelligence drives the ability to know the consumer in a way that larger infrastructure and couriers can’t in India
[00:43:31] - Similarities between the rise of Shiprocket and the prior evolution of the Chinese eCommerce and tech ecosystems
[00:46:59] - The next pieces that need to be built for Shiprocket for them to continue growing and succeeding at the rate they are
[00:53:07] - The tension of vertical integration without building out capital-intensive infrastructure
[00:55:53] - Thoughts about the opportunity set for India going forward
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