Parsel Aims to Become the Ultimate SaaS Solution for Everyone with a Logistic Need

Parsel is a combination of the dedicated efforts of its 3 diligent co-founders, whose universe encompasses the growth and growth of the company. Their vision and desire to break all glass ceilings in the world of logistics is infectious.

Akhil Sharma, the CTO, was a county player for Gloucestershire cricket club in England and had developed games that topped charts in several countries. He came to India sensing the growing wave of entrepreneurship and collaborated with his childhood friend, Himanshu Meena, hoping to leverage his own technology experience with Himanshu’s management expertise. Himanshu, the CEO, was a national level badminton player, who worked as a fund manager for several politicians and had even cleared civil and engineering services. Rakesh Kanni, the COO, had headed marketing for India, Bangladesh, Nepal and Srilanka for a top FMCG company and had even developed a main stream product for them.

Here the excerpts from the interview with Himanshu:

1. What gave you the idea for Parsel?

Two years before we actually launched Parsel (while we were still with our jobs), we studied all the startups across the world, categorising them on the basis of their industry, business model, target audience and how were they gaining market and traction.

We realised that business basics were changing. Earlier assets were accumlated to generate revenue. However, currently, these assets are seeing excess capacity. Technology provides a chance to improve this utilization. Also, the service parameters are changing. Shorter time duration is the norm for improving productivity across the supply chain. For this, a clear shift towards a technology-dependent model is required. Seamless integration of technology into the offline world has been something we were looking to work on.

The idea of Parsel came about when we saw this large dependence on supply chain management by the startups in any industry in general. When a startup launches itself with the concept of say “home chefs’ food delivery”, they would inadvertently get so involved in the delivery aspect of their offering that as much 70% of their time and resources were allocated to that. But delivery was not their core offering, the food cooked by home chefs was. Similarly, when established e-commerce players outsourced a part of their deliveries to us, they started making huge savings on operations.

In order to meet the requirements of our clientele, our delivery model works on scheduled and on-demand model. So, delivery agents are always on the go; for example, scheduled deliveries for first mile delivery with e-commerce clients are carried out in the morning, lunch orders for the restaurants along with by ecommerce package delivery to homes happen in the afternoon and evening followed by food delivery in the night. However, if there is an on-demand request, the nearest agent on the road is contacted by the client and this volume varies depending on festivals, days of the week, holiday season, sale season, etc.

Utilisation of capacity means that each delivery agent is on the road and is never unoccupied unless he is offline and that he gets paid for the number of hours clocked in.

We used these core concepts to develop our ideas and have had a fairly excellent demand for our services.

2. And how did you come up with the name 'Parsel'?

This was pretty impromptu and Rakesh takes the credit for this. We were pitching idea for intra-city logistics network to an investor but did not have a name for it despite going back and forth. The basic idea was to use a name that conveys that we could help with movement of goods of any size and should be easy to recall. Additionally, considering that we were going to be a B2B company, our existance should help our clients to sell better. So it was remodelled as Par+sell= Parsell. But since we were not actually selling anything, we got rid of the last l and the name agreed upon was Parsel. Although we could not convert the investment opportunity, but the investor really liked the name. So, we decided to stick with it. We developed the logo after multiple drafts. It signifies the location pin encompassing the letter ‘P’ at the same time.

3. What sets Parsel apart from other hyperlocal delivery players?

Firstly, Parsel is not a hyperlocal delivery company. It is different in following ways-

• We are technology company which aims at improving capacity utilization for intra-city goods distribution, through better matching of demand supply, streamlining goods movement through information streamlining and better routing.

• Hyperlocal companies are focused on specific segments and have opertional restriction of 3-5 km. We are focused on helping goods movement within city limits.

• Hyperlocal players are focused on specific segments. In our experience this is not a viable strategy. Average revenue per delivery is small, so volumes have to be high for running a profitable model. Focus on a particular segment restricts the demand pool. Cross utilization across segments is crucial.

• As per our understanding, we see Parsel as platform where three different kinds of flows occur-

o   Physical flow of goods- Actual goods flow

o   Information flow- Status of goods movement, stock movement, consumer patters, location based data etc.

o   Commercial flow- COD collection and reconciliation

Actual potential of the platform will be realized by using all above three avenues to generate revenue. And we are one of the few players, who have initiated using them as source of revenue.

• In our opinion, Parsel is a three-way platform which connects-

o   Asset owners (Vehicle owners)

o   Clients

o   Service providers/Entrepreneurs- Since logistics is very geography specific we appoint service providers, who are akin to distributors in FMCG industry. They act as aggregators and operational partners, who are integrated through technology.

• We have delivered the most efficient utilization of capital. Also, we achieved operational profitability quickly and are looking to be self sufficient. This will mean capital will be deployed for expansion and innovation of technology.

4. What is your take on the assumption that the hyperlocal delivery market is overcrowded?

No. The market is very young and we will always see different sorts of testing and modelling. Ken Research in their study named, India Hyperlocal Market Outlook to 2020 – Driven by Rising Startups Firms and Fluctuating Investments, believes the hyperlocal market in India will reach Rs 2306 crore in business by 2020. India is geographically vast, which allows for multiple logistics hyperlocal players to co-exist initially. What I mean is that every industry in the country – be it food startups, ecommerce, new malls, restaurants, corporate product giants or wholesalers -  requires distribution to improve the strength of its business. And by integrating technology with this distribution channel, we can massively improve our supply chain management system on the whole. These distribution channels can be organised across various spectrums and logistics startups like us can pick who we want to cater to. Parsel chooses to cater to everyone across the spectrum and that’s the beauty of capacity utilisation through efficient cross use of delivery agents, bikes and tempos.

5. What are the major challenges that you faced or are facing?

Adaption of technology is slow among various stakeholders. Although, we have worked on ways, where clients do not need to interact with technology much.

Also the earlier funded logistics startups based their business on the Uber model, which was the only thing they knew. But exactly following the Uber model for logistics is neither required nor advisable because-

1. Average revenue per delivery is about 1/6 that of Taxi industry. So volume needs to be higher

2. Subsequently, on-demand model is not always economically viable

3. Also, for clients, except for food, there is no on-demand requirement. Even in the food segment, many clients pre-book their orders.

The best strategy, then, is to have an optimum mix of scheduled and on-demand deliveries, where, we have a stable demand of scheduled deliveries and then, serve on-demand deliveries by cross utilization.

The challenge was to correct the environment and make people realize the correct strategy.

But people did not realize fundamental differences when following the model like-

o   Average revenue per transaction for taxi industry is 5-6 times that of goods movement (For smaller packets)

o   Taxi industry is well regulated

o   Taxi industry is essentially B2C, so customer acquisition tactics are different

o   Humans are able to interact but goods cannot. So flow control is very different

o   Movement of humans is not operationally very different across scenarios, but goods movement is

As a result, gaining confidence for a new model is time consuming

6. If not an entrepreneur, what wold you be?

I guess I would have been trying to organize the process of political campaiging in India. I had worked on 2 such campaigns in Polur, Tamil Nadu and Murshidabad, West Bengal ahead of the assembly elections.

7. What can we expect to see in the future from Parsel (as a company) and from you (as an entrepreneur)?

Parsel will continue to strive to achieve an ideal state wherein the goods movement is as streamlined as that of data transmission over internet. Technology will be expanded to provide additional services like-

o   Geo specific data

o   Customer verification services

o   Customer behavioral pattern

o   Sales force cross utilization

o   Express courier services

As entrepreneurs, our focus is Parsel and creation of a backbone network for inter-city goods distribution and usage of this information for improving the entire supply chain.

8. How has the consumer feedback been?

For our clients, we have consistently been one of the best service providers. In fact, now we are involved in operational and technology planning with and for our clients and are exclusive partners to many.

9. Which has been the most rewarding moment in your journey of building Parsel? In 5 words, define the culture of Parsel?

Rewarding moment. Hmm…still to arrive at I guess. Did not have much time to think about that!

Our culture is one of diffused ownership, which is of essence to our business model and the industry. Before the industrial revolution, manufacturing of goods was diffused. However, with industrial revolution it became highly concentrated and tremendous benefits we reaped because of this. Also, operational studies became focused on such models. Subsequently, even service industry followed this model (Example- You travel to a restaurant to have food). However, customer expectations have changed and services have to be very geography specific and customized now. Subsequently, ownership has to be diffused. (Example- Food has to reach the customer)

10. Which is the one value in your firm that you are proud of and which value you still wish you could instil in your employees?

Sense of ownership is very strong in our team. But I wish we can instil a greater sense of perseverance too, as the results may be slow on certain occasions since we are looking at fundamental alterations in an archaic industry.

11. What is the craziest thing you have done?

Unsupervised zorbing downhill.

12. If you had a week with unlimited money what would you do?

Invest and acquire assets like equity in companies, natural resources etc. This will give me unlimited access to money throughout my life! Then I can plan for more efficient utilization of that wealth.

13. What are you afraid of?

That I may not have put in my perfect effort.

14. Tell me something you wish you hadn't done.

Compromising on my health and my social life for Parsel.