Smaller online brands face delivery challenges

Hindustan Times

3 days ago

If you are an avid online shopper buying not only from the established e-commerce marketplaces like Amazon, Flipkart and Myntra but also from new direct-to-consumer (D2C) brands in beauty, fashion and food, you may have experienced some service issues in the latter. At times orders placed on D2C sites get delayed or even returned without your knowledge. Often, a small-sized product is delivered in an unnecessarily oversized box and you end up cursing the brand for wastage. But it may not always be the brands' fault. The poor service could be a result of their logistics partners or shipping aggregators playing spoilsport, resorting to what the D2C eco-system calls 'dark patterns' in the business-to-business e-commerce space. Smaller online brands face delivery challenges
Typically, in e-commerce 'dark patterns' refer to the tricks that digital platforms play on consumers misleading them into subscribing to a service, adding stuff to their shopping carts or not divulging hidden costs. But now D2C brands are calling out the 'dark patterns' they find in the opaque practices of their shipping partners leading to loss of brand equity and revenue. 'Malpractices in the logistics space are being called 'dark patterns' as they're subtly designed yet deliberately embedded features that prioritize aggregator profitability, often at the cost of brand trust, transparency, and margins,' explained Abhiroop Medhekar, co-founder and CEO of Velocity that offers fintech and data and analytics solutions to D2C brands.
In a recent post on Linkedin, Jeevika Tyagi, co-founder of aastey, a women's athleisure label, said the hardest part of running a D2C brand is delivering the goods. Third-party logistics partners bleed the businesses, delivery agents lie about deliveries and escalate returns which affect margins, she wrote. This often results in the painstakingly acquired customers to turn away.
Shipping and logistics have long been a pain point for D2C brands, agreed Yajurv Gupta, founder of AYA'S Jewellery. 'Weight discrepancies, high Return-to-Origin (RTO) rates, fake delivery attempts, inaccurate status updates and poor customer support directly eat into our margins,' he added. Many shipping aggregators focus on large-volume clients with dedicated account managers, leaving smaller brands with inconsistent service quality, Gupta said. 'Over time, this lack of prioritisation turns logistics from a growth driver into a growth bottleneck,' he added.
India's e-commerce ecosystem currently has nearly a dozen active shipping aggregators though there's been consolidation in the past few years. Companies like Pickrr, Nimbuspost and Shipway got acquired by Shiprocket, Xpressbees and Unicommerce respectively. Six months ago, Velocity launched its own shipping platform Shipfast, which, Medhekar said, was built to challenge the opacity that has long plagued the shipping aggregation space.
Jaffrey Thomas, partner, logistics and transport Infrastructure at PwC India, said the shipping logistics ecosystem faces structural challenges. 'Shipping aggregators often have limited control over the actual last-mile courier partners they have on board, which can lead to inconsistent service delivery.'
'Instances where orders are marked as 'delivery failed' without any attempt especially during peak seasons adversely affect customer experience. Additionally, the tiered platform fees with unclear add-ons further complicate cost predictability for emerging brands,' Thomas added.
Weight-based overcharging is also common. If a shipping company charges ₹50 for a small box and ₹100 for a larger one, it will unnecessarily upgrade deliveries to the higher slab. Weight discrepancies alone can inflate a brand's monthly logistics costs by 10–15%, said Velocity's Medhekar.
'Fake non-delivery reports are more prevalent in smaller towns where delivery agents return parcels without actually trying to deliver them as it benefits the courier companies,' he added.
These issues require a quick resolution to maintain the Indian e-tail market's growth momentum which is expected to reach $170–$190 billion by 2030, according to a report by Bain & Co. and Flipkart. In 2024, India had more than 270 million online shoppers and almost 60% of new customers since 2020 have come from Tier-3 and smaller cities, the report said.