There is a massive opportunity in courier aggregation as e-commerce is evolving fast and has sufficient headroom for growth in the coming years, Kapil Makhija, managing director and chief executive officer of listed e-commerce SaaS platform Unicommerce, told Mint, shortly after announcing the acquisition of courier aggregation and automation platform Shipway.
“Courier aggregation is a large opportunity. Today, it accounts for more than 85% of Shipway’s total revenue and will continue to be a primary driver going forward. It also ties in with Unicommerce’s core products,” Makhija said in an interview.
The e-commerce enablement SaaS platform acquired a 42.76% stake in Shipway for ₹68.4 crore in cash, and will acquire the remaining stake within a year through a stock swap by issue of equity shares or a merger, it said in a stock exchange filing late on Monday evening.
The entire deal is expected to be worth ₹200 crore, according to a person in the know who did not want to be named. Unicommerce’s Makhija did not comment on the total deal size.
Founded in 2015, Gurugram-based Shipway offers shipping software solutions to over 3,000 e-commerce and direct-to-consumer brands across 29,000 pin codes. It also provides an automated marketing platform called ConvertWay to equip brands with artificial intelligence-powered marketing tools.
Strategic alignment
Shipway competes with Temasek-backed Shiprocket in the courier aggregation space which is a roughly ₹3,800-4,300 crore market, according to industry estimates. The acquisition allows Unicommerce to enter a brand’s customer engagement journey which includes marketing automation and chatbots for sales and support, he said.
“Right from transaction processing, courier aggregation and customer engagement, we are able to now straddle across the entire value chain and brands are able to get everything under a single umbrella,” Makhija noted.
The company will invest more on scaling the segment after monitoring growth over the next few years, he said. The Kunal Bahl-backed company continuously observes white spaces in the e-commerce enablement journey and will take active steps to capitalize on opportunities that will be created as the industry evolves, the executive added.
“While e-commerce has been around for a decade if you zoom out and see, in India, the number of shipments that were processed last year were only 4.5 billion. Compare that to China which did about 130 billion plus shipments last year. The headroom for growth for e-commerce is significant,” he said.
Direct-to-consumer (D2C) continues to grow, too. The market is likely to triple in four years to reach $61.3 billion by FY27 from $17 billion in FY23, buoyed by increased targeting by brands, hyper-personalisation, increased competition and rise in per capita earnings, according to a June report by market intelligence firm 1Lattice and venture firm Sorin Investments.
“There is a large potential for the transaction processing layer where we operate today. And with Shipway coming in, there is a large potential in courier aggregation and even in the pre-purchase segment as well,” Makhija noted.
Unicommerce’s shares on Tuesday fell 1.6% to settle at ₹193.90 apiece. Its current market capitalisation stands at about ₹1,900 crore as on Tuesday.
