Fresh

Express

Amazon HackOn submission for team CodingAlphas

30th MAY 2021

Introduction & Background

After the immense success of Flex & IHS programmes in India we are happy to announce the launch of a fresh new idea which can supposedly change the lives of millions of people in India - FreshExpress. This is our unique take on the much touted Hyperlocal delivery model which can save Amazon a lot of money in terms of revenue and shipping costs. Last mile delivery, also known as last mile logistics, is the transportation of goods from a distribution hub to the final delivery destination — the door of the customer. The goal of last mile delivery logistics is to deliver the packages as affordably, quickly and accurately as possible.The last mile of your product’s delivery accounts for more than 53% of the total shipping costs. Given that the vast majority of deliveries are small packages, these numbers reflect small parcels rather than large cargo.

The hyperlocal marketplace as the name suggests is a market that caters to the needs of a limited geographical area. A walk around your residence would most definitely make you come across a similar market, however big or small but self-sufficient in its own right, fulfilling almost all the requirements of the local residents. The USP of hyperlocal e-commerce businesses lies in their ability to deliver products and services at unbelievably fast speed. With the implementation of our model any business can accelerate their growth by using the following features.

1. Auto-detection of customer’s location

2. Shipment scheduling

3. Product filtering based on location

4. Automatic shop suggestion based on unique recommendation engine

The objective of this model is to locate a source providing the best overall value to the customer at the least possible time.By fixing the price of the products in hyperlocal “stores” defined in a given geographic region Amazon can benefit from the program by reducing the “last-mile” delivery costs to a fraction of the previous amount while at the same time gaining new customers by providing a fast,efficient and streamlined delivery system.

Business Model & Proposals

The following Business model & Requirements apply to this Proposal:

There are two components of a business model — qualitative and quantitative. Let us begin by looking into its qualitative aspects:

Value Proposition : The fundamental proposition of the company to the various stakeholders is simple and may be described as follows :

1. User -- The service offers convenience of saving time by delivering the items in the shortest possible amount of time.It also offers a plethora of options to choose from the hyperlocal market.

2. Store -- Increased sales due to higher discoverability & visibility amongst the densely populated residential areas along with better mapping and management of inventory. Amazon also provides credit and advisory services to help these “Amazon” stores. Local “Amazon” stores affiliated with “Amazon” at every nook and corner of the locality.

3. Runner -- Works as pleases for some extra monthly income. Is always tied up with a local store. ”Amazon Flex” service & “Amazon prime” 1-day guaranteed delivery as backup in case of unique product items not available in any of the hyperlocal stores.

4. Investors -- FreshExpress becomes a ‘SuperApp’ solely owned by “Amazon” and controls most of the online market harnessing the power of data & technology to further improve/expand the business. The last mile delivery problem for the investor is solved along with some extra income in the range of (5-10%) per transaction which can be charged from the Stores for using their provided services and app.

Market Opportunity : The market size in India for online grocery is currently just 0.2% of the overall grocery market and is expected to touch 1.2% of the overall by 2023. There are several possible reasons for this. One is the definition of the market. Hyperlocal today encompasses more markets than it did earlier in 2015. Second is the expansion of the market. Newer ideas such as medicine delivery, homecare services and particularly micro delivery(Milk and other essentials) have seen exponential growth in terms of the number of users. Users of these services can prove to be stickier than those of food delivery and ride-hailing.

Market Dynamics : The demand side for the applications composed of its paying customers. They would like to order grocery/cosmetics/electronics items and goods. The supply side however comprises a 3-sided marketplace consisting of Kirana/Mall/Shop who is the provider of the service & goods whereas the delivery personnel owned by the Kirana/Mall/Shop connects the provider to the customer. On expansion of this model to use cases other than food/grocery anybody can become a provider/runner. Continuous promotion of this model and primary network effect would lead to more local stores to be available in any locality providing “Amazon” with more revenue per se.

A few quantitative aspects of this model are as follows :

Revenue Streams : Income for hyperlocal delivery companies usually comes from merchant commissions and delivery fees from customers. Further, depending on the type of product offerings, such as in the case of subscriptions in the microdelivery segment, revenue streams may vary. Commissions fall in the sub 10% range for grocery delivery companies and can be between 10% and 15% for electronics goods providing companies. Amazon can also make money from brand advertisements displayed on their apps.

Cost Structures : The cost structure generally tends to be variable. These are usually the consequences that stem from the choices the management makes. Paying per delivery may help on-boarding runners but is not sustainable in the long run and can severely impact the unit economics. Rather, paying for timed slots would change the cost structure to fixed and can improve profitability as the business scales.This needs to be discussed with store owners as they will be the sole decision makers for the delivery part of the service.Surprise quality inspections has to be made on local stores to check the quality of products being sold in stores. With our unique rating & recommendation system a point based approach will be awarded to the shops so that the quality of the product and the services are maintained beforehand.Training costs for “runner” has to be borne by Amazon.

Societal & Economic impacts : Jeff Bezos says Amazon will invest $1 billion in digitising Small and Medium Businesses (SMBs) in India. With the advent of this model, the Micro Small & Medium Enterprises (MSMEs) & Small & Medium Business(SMBs) will benefit a lot. Every small business can be a part of a big brand as “Amazon” and every runner will be provided with a part-time and full-time income. Local entrepreneurs not only know their neighborhoods very well, but also enjoy the goodwill of their communities. This makes them an excellent choice as local delivery persons & store keepers especially within small localities. This will attract store owners to earn an extra income over and above their primary income. Moreover this will help small towns and cities where Amazon warehouses are still not available and the cost of delivering items is still huge. This model will save huge costs for the company and will provide a medium for the small/medium storekeepers to earn an extra source of income above and beyond their usual means. The “runners” will also be provided with training and education along with customary rewards for their service to this programme.

Project Description

The purpose of this project is as follows:

1. Conversion from Unorganized retailing to organized retailing

2. Connecting all the local stores via digital plattform

3. Reducing the latent distance between the sellers and buyers .

4. Facilitating easier and hassle-free replacement and alteration of products

The components of the project is as follows:

1. Customer-Facing Application

2. Store-Keeper Facing Application

3. Recommendation Engine

4. GeoHashed distributed database according to the locality

Project Scope

This project is based on a hyperlocal delivery model.It can be defined as an online business model in which the on demand needs of a customer are met through local offline shops via a digital plattform . The demand for goods and services of customers like grocery ,local items (small items ),Kirana shops,Local items are met instantly without going there.

This model is built using the django framework with a database as cockroach db so that clients can access data from anywhere . The cockroach database is a distributed database with standard SQL

This model helps the customer to deliver the products in the shortest time possible.

The criteria set forth below should be met to achieve successful completion of the project:

1. Customer can order products without any problem

2. Stores can register and list their inventory online

3. Delivery of products should be within expected time delivery

4. Nearest shop is selected resulting in low waiting period time

5. In case of unavailability of items,orders should be fulfilled via flexible delivery

Acceptance of the work is contingent on the following acceptance criteria:

1. [CRITERIA 1]

2. [CRITERIA 2]

3. [CRITERIA 3]

4. [CRITERIA 4]

5. [CRITERIA 5]

Project Timelines

The Project timeline is as follows:

Request for Proposal Issuance	17/05/2021
DataBase Design Finalized	18/05/2021
Cockroach Database Connection Established	19/05/2021
Recommendation Engine Established	22/05/2021
Functionalities added for 1st stable prototype	24/05/2021
Minor Bug Fixes & Functionalities Improvement	28/05/2021
Client Project Delivery	30/05/2021
Client Project Demo	11/06/2021

The need-date for project completion is 30th May 2021. Judges may propose a date earlier or later, and work has to be ramped up accordingly.

Budget

[COMPANY NAME]’s budget for the project is [DOLLAR AMOUNT].

Evaluation Factors

Logistics, as the backbone of the e-commerce industry needs to be optimal in order for the industry to thrive and grow. In India people tend to buy many items from local grocery stores and stores . Meeting the needs of a customer by providing products and services within 1hr.

Local retailers and stores collaborating with online platforms to employ hyperlocal strategy would help their business. A hyperlocal strategy would bring considerable improvements to the aspect of rapid delivery.

Hyperlocal strategy can be a key differentiator and driver for businesses. It has the potential to bring more local clients to local stores and dramatically reduce inventory and logistics expenses of online shopping platforms.

It also has a considerable appeal to consumers given the possibility of unforeseen reduction in delivery times

Many of the options were developed in the past such as last mile delivery,crowd shipping but none were completely helpful. Connecting local stores with the online platform and expanding their business would increase their business sles and also helps to connect every store globally .

[COMPANY NAME] will rate proposals based on the following factors, with cost being the most important factor:

1. Responsiveness to the requirements set forth in this Request for Proposal

2. Relevant past performance/experience

3. Samples of work

4. Cost, including an assessment of total cost of ownership.

5. Technical expertise/experience of bidder and bidder’s staff

[COMPANY NAME] reserves the right to award to the bidder that presents the best value to [COMPANY NAME] as determined solely by [COMPANY NAME] in its absolute discretion.

Active Issues

1. Heroku application deployment times out at 30secs. In local deployment the timeout can be fixed to 2-5 minutes which is the practical time for a shopkeeper to accept an order in an ideal scenario.The range can be made flexible accordingly. Possible Resolutions : Moving the application to AWS where the timeout can be maintained in a range of 1-3600 secs which is practical for our intended scenarios.

2. “Get your location” button in the homepage is not working . The button takes user location through HTML Geolocation API and prints in the console. For our test scenario we have defined an ideal region in the map with 12 nearby shops. Possible Resolutions : Once the prototype is successfully implemented and business data is collected this model can be extended and implemented to every location in any region in India. The user location will then be stored into a database for further processing by the recommendation engine.

Future Plans

1. Drone Based Delivery Subsystem using Amazon Air.

2. Use of the existing transportation systems to facilitate faster deliveries.

3. Amazon Pay payment integration for faster checkouts and payment processing.

4. Amazon Flex integration with the existing application.