Financial Daily from THE HINDU group of publications
Saturday, Oct 19, 2002
Supply Chain Management
Marketing - Channels and Franchises
Elbee to expand franchisee network
Tunia Cherian George
MUMBAI, Oct. 18
EXPRESS transport company, Elbee Services Ltd, plans to expand its network through the appointment of more franchisees. It has named a master franchisee, Express IT, to oversee the operations of franchisee network.
The company, which currently has about 25 franchisees in Mumbai, hopes to have 50-55 in place by the year-end. It is planning a similar expansion in other major cities, according to Mr Sandip Shah, Chairman and Managing Director, Elbee Services.
The company had also recently shifted its Mumbai hub to a new 20,000-sq.ft. facility. The building, set up at an investment of Rs 80 crore, has been financed both internally and through financial institutions.
Elbee, which handles 65-70 per cent of all credit card deliveries in the country, is aided by a customer service support team. Mr Shah told Business Line that the company had established a model for the growing credit card business. It has tied up with Stanchart, SBI, AmEx and ABN Amro for this service. It has also taken up the management of the entire mailroom at the International Business School in Hyderabad.
Under its IT initiative, the company had recently launched SMS tracking of consignments. Large customers have been given customised login names and they receive MIS data in a format suited to their work systems. Elbee, which launched Web tracking in 1997, has invested Rs 20 crore on IT initiatives since 1994.
According to Mr Shah, the company's e-com foray, which has recorded a turnover of Rs 3-3.5 crore, should grow phenomenally in the next three-five years, with B2B business outpacing B2C.
The company is the sole provider of BOD (bill-on-delivery) services where the consignee receives in-bound consignments at his/her expense from multiple origins or consignors, for domestic consignments. It also offers CVC (consignment value collect) and COD (charges on delivery) services to large customers.
Under the CVC service, the consignor sends consignments with the statutory charges, but with the value of the consignment to be collected from the consignee against delivery. Under the COD service, the consignor sends consignments with freight and statutory charges payable by the consignee against delivery.
Under its management trainee scheme, the company has recruited fresh management graduates and trained them on the job. Many of such recruits now man positions in its middle management.
Elbee expects 75 per cent of its revenues to come from non-document movement. The company, which has shown 20-25 per cent growth in the past 10 years, barring the past 11/2-year when revenues came under squeeze, is looking to notch 20-25 per cent growth over the next five years. Business, Mr Shah said, was likely to remain flat this year, with the turnover likely to be the same as that of last year at Rs 120 crore.
He expects that some consolidation will take place over the next two-three years, as the business in the country is "not mature enough at this juncture.''The MNCs, which had arrived, were on the lookout for acquisitions and might acquire domestic companies in a bid to extend their reach in the country, he said.
Elbee Express Service has also launched an international freight service, Elbee Freight Express (EFE), which will offer customers multiple options such as door-to-door, airport-to-airport, door-to-airport and airport-to-airport single agency dealing, all inclusive/consolidated rates and the infrastructure of a large company. The company, which will bypass freight forwarders who have limited flexibility and hidden costs, will leverage on its expertise in customs clearance, and its strong domestic network and custom clearing capabilities such as the CHA licence and the IATA and FIATA certificates.
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