From classroom to start-up: Reimagining e-commerce returns in India

The model is built around the ‘fortressing’ strategy pioneered by Domino’s, which involves shortening delivery radiuses and having stores close to customers
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Student speaks(Pic: Accenture)
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What began as an academic study of India's e-commerce challenges has evolved into a mission to solve the country's annual Rs 24,000 crore e-commerce returns conundrum.

My journey from an MBA classroom to winning the business school track of the Accenture Innovation Challenge 2024, and now aspiring to take a ready solution to market, exemplifies how industry-academia collaboration can catalyse practical solutions for real world problems.

While studying India's e-commerce landscape, I found that returns are a silent profit killer — with return rates as high as 30-40% in Direct to Consumer (D2C) brands, and each return costing brands up to six times the forward shipping cost. The current returns process creates inefficiencies, delays, and high costs for brands, inconveniences customers, and delays their refunds, while also increasing the carbon footprint.

Customers are left wondering when their refund will be processed, while brands fret about the impact on their bottom line and turnaround time.

Most solutions focus on the web platform — reducing cart abandonment rates, enhancing intra-website Search Engine Optimisation (SEO), and using customer profiling to reduce returns at the ‘buy’ stage.

These approaches miss the larger problem, which is the need to resolve issues in the logistics value chain right at the point of return and the need for a more full-scale logistics intervention.

This is where my solution Black Garage comes in.

The supply chain triangle — of speed, cost, and quality — governs the operations of most logistics firms. It is almost considered axiomatic that it is not possible to optimise for all of these three vectors simultaneously.

Thus, e-commerce behemoths and the newer quick commerce entrants choose any one dimension to differentiate themselves in. However, this paradigm can be changed by making logistics handling more efficient. 

The unique selling point of Black Garage is its India-centric approach that factors in an affordable workforce and high population density centres, which can be adapted globally at scale. While international players focus on traditional reverse logistics, Black Garage uses a unique fail-safe hybrid model.

The model is built around the ‘fortressing’ strategy pioneered by Domino’s, which involves shortening delivery radiuses and having stores close to customers.

By combining Artificial Intelligence (AI)-powered peer-to-peer matching with a network of local stores and decentralised warehousing, the system ensures 100% return resolution. While there are a lot of nuances, the simulations run so far show compelling results: processing time is reduced from eight-12 days to mere hours, costs are cut by 60%, and carbon emissions are halved.

I represented SP Jain Institute of Management and Research (SPJIMR) and presented Black Garage at the recently held Accenture Innovation Challenge, which saw over 200,000 students from over 7,000 colleges in India present generative AI-led solutions to solve real-world business and societal challenges.

The industry validation and mentorship I received from the Accenture Innovation Challenge served as a crucial validation checkpoint for Black Garage and provided insights about real-world implementation challenges. It helped me bridge the gap between academic concepts and market requirements.

The challenge has helped Black Garage shape into a real-world business venture, with features like on-spot AI quality verification and dynamic pricing algorithms adapted to local market conditions. The overwhelming response from industry experts has reinforced my commitment to pursue this venture full-time.

As India progresses towards becoming a global technology powerhouse, such collaborations between academia and industry will be crucial in building solutions that can scale from being local innovations to global game-changers.

Black Garage's journey is just beginning, but it demonstrates how the right blend of academic rigour, industry insight, and entrepreneurial spirit can create solutions that have the potential to reshape entire industries.

(Aditya Guha is currently a student of the Post Graduate Diploma in Management (PGDM) batch of 2023-25 at SP Jain Institute of Management and Research (SPJIMR). He is the winner of the B-school track of the Accenture Innovation Challenge 2024 and is working to develop his logistics solution, Black Garage into a market-ready offering. Views expressed are his own.)

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