RaRa Delivery‘s ambitious goal is to offer same-day deliveries in Indonesia without burning cash like many on-demand logistics providers. Today, Sequoia Capital India and East Ventures announced that the company has received $3.25million in seed financing. Others who participated were 500 Startups and Angel Central as well as GK Plug and Play and the angel investors Royston TAY and Yang Bin Kwok.
RaRa Delivery was launched in 2019. It uses a proprietary engine to batch orders and optimize delivery routes using data such as real-time traffic information. The company is currently operating in Greater Jakarta, and plans to expand its reach into five additional cities in Indonesia this year.
RaRa Delivery’s mission is to connect with Indonesian marketplaces so that sellers have the option of offering it to their customers as a delivery service. The company partners with small-scale e-commerce companies, brands and seller aggregators. Blibli is an e-commerce platform, Grab Merchant, Kopi Kenangan’s coffee delivery service, and Alodokter, a healthcare platform, Grab Merchant, Sayurbox, Sayurbox, and Alodokter are some of its notable customers. RaRa Delivery claims that its daily orders have increased 150% over the last year due to an increase in demand for medical supplies and grocery delivery during the pandemic.
Karan Bhardwaj, the co-founder of RaRa Delivery and its chief executive officer, worked for Unilever in managing their e-commerce supply chains throughout Southeast Asia and Australasia. He dealt with many distribution channels during that period, including marketplaces and last mile delivery providers.
Bhardwaj has seen customer expectations change over the years. Customers are not satisfied even with next-day delivery. Many customers want their order delivered within 24 hours, sometimes as soon as possible.
Bhardwaj stated that a good experience is more of a necessity than a luxury over time. There is Amazon Prime in the USA, China has SF Express, South Korea has Coupang and South Korea has Coupang. However, same-day delivery hasn’t reached its full potential in Indonesia due to a lack of the correct supply solution. That’s precisely what we want to fix.
Bhardwaj said that customers are prepared to pay up to two-to three times as much for next-day delivery than for next-day delivery. And even more for delivery within one hour.
Traditional logistics companies, which have a hub-and-spoke distribution model, do not make it possible to deliver on-demand. On-demand providers, on the other hand, can be very expensive because they only dispatch one shipment.
Bhardwaj stated that if a company has 10 orders they will send 10 drivers, and each driver is only going to take one order. They can deliver in three hours, but they do not offer consolidation or optimization. There are distance and weight limitations, as well as no cash delivery.
RaRa Delivery’s real-time batching system was developed to be more sustainable and scalable. Its drivers fulfill orders from many types of companies, including food and beverage, groceries, healthcare, and ecommerce. Each business has different delivery requirements. A restaurant may need deliveries within one hour. However, grocery stores can take up to three hours and e-commerce stores eight hours.
RaRa Delivery organizes orders once they are placed. Based on traffic data, the system optimizes distance, capacity and time slots, as well as driving routes. You can combine up to fifteen orders in a batch. Their composition is also flexible. Some batches may have pick-ups and then deliver, while others could include pick-ups with delivery. It all depends on the best route.
Bhardwaj stated that this increase in RaRa Delivery drivers’ earnings is due to the fact they make multiple trips and decrease their downtime. It takes approximately two to six hours for each RaRa Delivery batch.
A driver will take an order, complete it, and then wait for another one. This is a typical on-demand situation. He said that waiting is the reason drivers earn less.
RaRa Delivery allows cash delivery. Delivery services that offer COD typically require drivers to return to the hub in order to pick up their money. RaRa Delivery’s reconciliation tool shows drivers the amount of cash they need to get for every order. After they have completed, the code generates so that the driver can deposit cash at a convenience shop instead of the hub.
It plans to raise seed capital for the startup. This includes expanding the product ecosystem which already features a batching engine and a seller portal. Real-time order tracking is also available. A chatbot for customers can be used as well as the COD reconciliation.
For its first rollout, it was focused in Tier 1 cities of Indonesia. Then it expanded into smaller cities to cover the entire country within a few years. RaRa Delivery also plans to expand in other countries. Bhardwaj stated that the batching engine of RaRa Delivery is geographically-agnostic and requires little localization to reach new markets.
Publiated at Wed 18 August 2021, 03:23:04 +0000