Can Delhivery deliver on growth?

livemint.com:

BENGALURU : There is one question Sahil Barua, the managing director and chief executive officer of Delhivery Ltd, is always asked. Well, ever since the third-party logistics company started, in 2011. What about competition, particularly from the logistics arms of large e-commerce platforms? Take the latest earnings conference call, held on 21 May.

At least two analysts quizzed Barua on Amazon and Flipkart—the two e-commerce giants run their own logistics operations but have recently started third-party logistics services. This means they can ship and deliver goods for companies and people who don’t necessarily use their marketplaces. That’s Delhivery’s playfield.

“We have seen Amazon increasing capacity and Blue Dart also inducting new planes ...how does Amazon adding capacity impacts us (Delhivery)?," one analyst at the call asked. “I think Amazon adding or not adding capacity makes no difference to anybody other than Amazon. So, it’s quite irrelevant as far as Delhivery is concerned," Barua responded.

“The self-logistics arms, at various points, have flirted with the idea of externalizing their services. But unfortunately, strategy is easier to conceptualize than to execute. And I don’t think their expanding capacity is going to make any significant difference to the market," he added.

The questions around growing competition surfaced on the backdrop of a difficult year for Delhivery. In its first year of operations, in 2011-12, the company generated revenue of a paltry ₹1 crore. It has speeded its way up ever since, growing significantly every year.