1. Employment: SF currently has an extensive network of 30,000+ delivery partners on its platform and plans to increase this to more than 1 Mn over the next 5 years.
1.1. SF is playing a key role in creating entry level jobs for people coming into the delivery sector. Drivers are trained by SF and have an opportunity to learn how to work with customers across different categories. There is high driver turnover in this sector, with drivers moving across platforms. Drivers, with skill sets developed through SF have the opportunity of being hired by large employers such as Amazon, Flipkart that offer a career path (at fulfilment centers, etc.) in addition to the upward mobility SF offers its drivers.
1.2. Driver payouts on SF are about 40% higher than their most recent jobs and comparable options in delivery logistics since they have increased access to delivery opportunities and improved capacity utilization (current estimate of idle load rides in last mile logistics is 60%).
1.3. Drivers can also opt to work part time by choosing to deliver orders during certain time slots. This provides them flexibility and helps in supplementing their regular income. SF also offers drivers an option of collecting payouts on a weekly/ biweekly basis, which is not common in the unorganized last mile delivery market, and digital payments to drivers further decreases informality
2. Market Impact: SF contributes to market creation by (i) tech-enabling the sector and developing innovations in key aspects of logistics (example reverse logistics) and by (ii) systematically training delivery staff. IFC believes that SF is best placed to improve this market compared to incumbents and competing platforms due to its superior technological integration and optimization capabilities. As the Company scales and aggregates more drivers and customers onto its platform, it is expected that its digital platform will increase price transparency and efficiency in the broader sector. Other competitors and aggregators will be forced to compete on pricing and improve their game with regards to their technological capabilities and product offering or risk losing market share. Additionally, it is expected that the role of brokers and intermediaries in the sector will diminish, which will improve overall price transparency and efficiency. While the sector has already undergone some consolidation, IFC anticipates that this will continue as SF emerges as the dominant platform in the sector. Through a demonstration effect, new platforms that have the same level of technological sophistication as SF could emerge, which will foster more competition as the platforms compete to take market share by constantly improving service standards and driving down market wide logistics costs. Furthermore, SF will help grow the relatively nascent ecommerce last mile logistics sector. While the demand for last mile delivery has grown tremendously over the past years (driven by the rise in ecommerce), the market is still in the process of being created.
3. Helping SMEs: SF currently serves enterprise clients and independent SMEs including small retail stores, small local restaurants and franchisee outlets of restaurant chains. It provides an efficient and distributed hyperlocal logistics platform to SMEs for serving evolving customer needs of faster and cheaper product delivery through an online to offline channel (O2O model). SF offers prices that are 30%-40% cheaper and aims to increase their access to markets in Tier II, III and IV cities by giving them the option to deliver next day to customer. By helping SMEs with an online presence provide the same level of service as large retailers, SF can help make these SMEs more competitive. SF is currently in 80+ cities in India and is rapidly and actively increasing its geographic coverage - as of FY17, they were in 20+ cities. SF has served ~7,000 SMEs since inception and is targeting to reach to 100,000 SMEs by 2022.
