In a little over seven months since its launch in late May 2022, the InterGlobe Enterprises and UPS JV, MOVIN, has become the fastest-growing logistics player in the Indian market. Business Today’s Manish Pant caught up with MOVIN Express' director J B Singh (59) at the B2B logistics company’s Gurugram office for a comprehensive discussion on his outlook of the market, future growth strategy and the rising Indian economy amid the current geopolitical uncertainties. With nearly four decades of experience in India’s vibrant travel and hospitality sectors, Singh was previously the president & CEO at InterGlobe Hotels before taking charge as MOVIN head. A firm believer in India’s capacity to deliver, he especially highlighted the role to be played by the big industry and the MSME sector in not only growing the logistics business but also in leading the country’s charge toward the $10-trillion target into the next decade.
What led to InterGlobe, better known as an aviation and hospitality conglomerate, to launch the B2B logistics brand MOVIN?
We had been evaluating diversification for a while at InterGlobe. Whilst we are heavily into travel and hospitality, at our core lies driving excellence through the successful management of joint ventures (JVs). A couple of things have always been important to us. Firstly, to get into a market that needs structuring. Secondly, one of the keys to our success has been the quality of partners we bring to the table. Thirdly, logistics is a high-growth environment valued at over $200 billion and is expected to witness incremental growth over the next 12 years. As India grows into a $10-trillion economy, logistics will become the backbone of the industry. UPS, the world’s largest courier company, showed interest in coming and doing a domestic play in India. That ticked all our boxes. What UPS brought to the table was its 115 years of expertise in the industry and InterGlobe its understanding of the country and driving compliances. That’s how the two organisations came together to create MOVIN.
Launching on May 26, 2022, how has the brand whose name denotes ‘movement’ and ‘India’ expanded its footprint across the country?
Our last seven months have been far better than what we had expected. We managed to grow incredibly fast, especially after July. We are now present in 49 cities from 28 in September, which was our first burst of growth. We are in 49 cities in the express and 16 cities in standard premium. We are already operating more than 3,000 pin codes in the country. With the base network now firmly in place, we will be rapidly expanding into peripheral networks. By March, all our ten hubs will get fully operationalised with our facilities. We have received an overwhelming response from our customers and there is a large future pipeline of industrial customers from all over the country that we are currently working on. Our on-ground performance has been very high, with a 97 per cent hit rate on deliveries.
What are the key reasons behind your rapid expansion?
We are technically the fastest-growing logistics company in India. Between MOVIN and outsourced, we have expanded our teams to add 800 plus people. And that is increasing with each passing day. We have a very solid onboarding programme. We will be doing the next burst of expansion in 4Q23. The science around growth is about ensuring that you drive in leadership and skills as very often growth becomes a burden on companies. One of our key strengths is that we are bolting all our processes, have a clear roadmap, have planned well and all our teams are aligned to ensure that we expand in a sustained manner on the cost side. For instance, we are running plus on our cash flow. But going back to May, we had focused the company on four pillars, viz people, partners, excellence and technology. Firstly, both within MOVIN and with our partners we take the selection of our people very seriously. Like, when the shortlisted candidates finally get to meet me – I meet everyone who gets signed on – they often complain that it is their sixth interview! We have a high rejection rate. Secondly, one of the big opportunities that we saw to make the business efficient was to curate partners across the country whom we train and upskill. We will soon be offloading around 3,500 training programmes to our partners, which they can use on their teams. Fourthly, in everything that we do at Movin, we look at it through a lens of excellence to discover the best, fastest, most cost-efficient and customer-focused solutions. Finally, when it comes to technology, we spent considerable time and resources in building a tech stack of global standards to completely digitalise the customer’s delivery journey from start to finish. This tech stack will become a powerful tool for us as the National Logistics Policy (NLP) kicks in and the industry digitalises.
Which industries are among your key customers at this point and what could be potential areas of growth in the medium and long term?
Currently, we are doing a lot of pharma, textiles, apparel, electronics and IT products. We are also developing specialised products to service other industries such as a facility for the automobile sector in Pune. But I take that as par for the course. India is such an industrious country and we are very much interested in empowering the MSME sector by offering them time and day definite products. We are working with all enterprise customers, but it is the MSME market that will grow well. The MSMEs are lean, efficient and agile. And given the right sort of access to capital and infra, they can outperform.
How successful have your efforts at integrating surface and air transportation been?
It is working out well. Of course, InterGlobe is there in aviation through IndiGo. But today we are IndiGo agnostic. We look at the fastest routes across the country. And as India keeps getting more connected, there are large parts of the country where you need to cover the last mile by road. Plus, with all the new infrastructure coming up, the country has done astonishingly well in improving connectivity in the last two years. That will also help us to grow seamlessly.
How have these two factors, Covid-19 and the Russian military action in Ukraine impacted the logistics sector?
Geopolitical issues will always be around till some kind of economic supremacy gets established globally. The whole supply chain issues emanating from China have disrupted both ocean and air freight. And that has caused disruptions in India as well as in other parts of the world. But allow me to explain why India is different. Its success in not getting caught in this whole economic downturn is a very strong indicator. Consumption is already growing in the country and our economic numbers are quite good. I don’t see India slowing down in logistics or other allied businesses. There is a very strong focus on exports. The government has got massive initiatives running on the manufacturing side. So, there is the export opportunity and then there is the on-ground opportunity within India and that makes us very bullish.
Does that also mean the jugaad or stop-gap approach that often led to stagnation across industries is giving way to new approaches?
There is a very big mind shift! Yes, India is a large country and change takes time. However, players like us also want to drive that change as it makes us more efficient. Structured businesses are far better to ensure sustained growth. There are enough companies in India who wish to deal with high-performance players. Responsible companies are having the same conversation that you and I are having today. They want a highly process-driven environment, they want things to move on schedule, they want things to happen on time, they want high-performance teams, they want to bring costs down and they want to make things more efficient. The other major mind shift is about the workforce we have been inducting. We often call it the ‘demographic dividend’. Look how we have leapfrogged in technology and telecoms. India has a large pool of smart people who just need to stay on course. But the shift that you have referred to, is coming in faster than we think it is!
How satisfied are you with the policy initiatives to reduce logistics costs in the country?
The policy is solid and digitalisation across all government bodies is fundamentally strong in terms of transparency and speed. The introduction of GST was a kicker of sorts in bringing about efficiencies. A lot of other developments are happening simultaneously. The government is looking at creating logistics parks. That will help create efficiency. China did that. Today, we have the big industry and MSMEs scattered everywhere. That will again take time, but they will consolidate in those parks. At the end of the day, the policy is well-inked and it needs to be ensured that it gets executed on the ground. But I believe that the government’s job is to only put out policy. It’s the industry’s job to execute it in the spirit the government sees it. However, we often believe the opposite!
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