Kashmir’s Villages Now Have Access To E-Commerce But Not Without A Cost

On a sunny August morning 24-year-old Suhail Ahmed of Halkah-Chittergul, a village in the Anantnag district in southern Kashmir located 100 km towards south of Srinagar, receives a call from a delivery agent about his parcel from Myntra. Ahmed expects a pair of jeans and a shirt he bought during Myntra’s sale a week earlier.

Receiving parcels from an e-commerce platform is still a novelty for the residents of Halkah. Even a year ago, no one from this village would have ordered things online as deliveries weren’t available in their location. They could place orders, of course, but they would have had to travel to Achabal, a small town 9 km from Anantnag and 31 km from Halkhah to receive their parcels. This changed in June 2023, when delivery agents started bringing online orders to their doorsteps.

"When I was studying in Srinagar some years ago, I used to order books and clothes there. But in our village, it was unimaginable that anyone could deliver items here. It's a remote area with very limited connectivity, so the idea of ordering something from online marketplaces was unthinkable," said Ahmed.

The reason for not delivering items to rural areas of Kashmir can be explained by the fact that logistics costs in the Union Territory are 10-15% higher than the national average. This is due to the lack of effective logistics infrastructure like roads that hinder the region from reaching its full potential, as per a government report.

Today, however, many villagers order goods from online marketplaces like Flipkart, Myntra, Amazon, and others. Consumers place orders from apparel to electronics, including phones, laptops, and cosmetics. Each day, over three delivery agents—all local boys familiar with the area's geography—visit the village to bring these parcels on their two-wheelers. Logistics startup FastBeetle started the last-mile delivery option and partnered with e-commerce giants like Myntra, Flipkart and others. Other national players like Delhivery and Ecom Express followed suit. Although Delhivery and Ecom Express had existing operations in Kashmir even in the early 2010s they were limited to urban areas like Srinagar until 2020.

 Delivery riders start their day by riding on two-wheelers early in the morning to reach the remote villages in South Kashmir's Anantnag district to deliver goods.

"When the service first started in the Chittergul-Halkah area, I would only deliver 10-15 parcels a day across the entire region, which includes more than 30 villages. But now, I deliver over 50 parcels daily, and at least three of them are mobile phones," said Zakir Ahmed Dar, 23, a delivery agent with Fast Beetle.

The Untapped Market

The change in how deliveries are done in remote areas is in line with the thrust for expansion by logistics and warehousing companies. With saturation in urban areas, delivery and warehousing companies have been looking to break ground in India’s tier 2 and tier 3 cities.

While startups have been playing a key role in bringing solutions to logistical challenges, FastBeetle has been the flagbearer becoming Kashmir's first and only local logistics startup based in Srinagar. It was founded by Sheikh Samiullah and Abid Rashid decided to delve into this business, setting up the company in 2019, when they recognised the need for reliable pickup services for businesses in the valley. Many local businesses were eager to expand and deliver items across India but struggled due to the lack of such services. National logistics companies either refused to pick up parcels or charged exorbitant fees, cutting into profits. “The idea was simple, to help local businesses deliver goods to different parts of India at a cheaper rate,” explained Rashid, the cofounder of FastBeetle.

Soon after its launch, FastBeetle not only provided pickup services in Kashmir but also began deliveries by partnering with Snapdeal. The collaboration ended quickly within three months due to an overwhelming number of return requests. Later the company was approached by Amazon, Flipkart and other marketplaces.

FastBeetle's success is a reflection of the massive gap they set out to plug. Initially, the founders raised Rs 22 lakh from friends and family, followed by Rs 80 lakh from angel investors at a valuation of Rs 3 crore. Later, FastBeetle became Kashmir's first startup to appear on Shark Tank India, raising Rs 90 lakh at a valuation of Rs 12 crore.

The company has since raised five funding rounds, securing a total of Rs 5 crore and is currently valued at Rs 40 crore. “Bringing investments to Kashmir is a very challenging task, and we knew it, which is why we always prioritised profit. We reached break-even within a year and started making profits the following year,” said Rashid.

As of now, FastBeetle gets a revenue of Rs 80 lakh per month with an average profit of 20% as per company officials. It aims to cover more market share in Kashmir for next three years by starting truck fleets (bigger item deliveries like washing machines etc) and then move outside the state to different difficult terrains of India.

“Despite the challenges, raising five rounds and achieving a valuation of Rs 40 crore shows the potential of logistics in Kashmir's tough terrain,” Rashid added.

A truck is parked and being unloaded at the Delhivery warehouse in Achabal, Anantnag.

Now logistics companies like FastBeetle and Delhivery have set up offices in almost every district and many subdistricts. E-commerce giants, which according to these logistic companies are the main suppliers of online products to the region, bring the goods in the region mostly through trucks and deliver them at the warehouse stores setup by these logistic companies. Though e-commerce giants like Amazon, Flipkart and Myntra have their own logistics services, they prefer logistic partners in the union territory mainly because they are aware of the challenges in the valley and local geography.

"Initially, e-commerce giants like Flipkart, Amazon, and Myntra were delivering less than 20,000 orders per month in the union territory. However, after partnering with us, we now deliver over 200,000 orders monthly on their behalf. This success stems from our deep understanding of the challenges and geography of the union territory. As a result, we not only reach remote areas, including border villages, but our low retention rate ensures a high success rate in deliveries," explained Sheikh Samiullah, co-founder of FastBeetle.

Boon For Local Businesses

The improvement in last-mile logistics has benefitted local businesses too. Small businesses in rural areas, which previously struggled to deliver products like honey, dry fruits, shawls, and traditional items such as Kaangris and paper mache items, can now reach different parts of India. Now they can reach a larger customer base with dry fruits, honey, and Kashmiri shawls being among the most popular items.

One such example is 25-year-old Mudasir Ahsan of Shangus, a village in Anantnag district located 75 kms south of Srinagar. Currently a master's student at NIT Srinagar, Ahsan sells organic Kashmiri honey under the brand "Kashmiruk." He explains, “When I started selling honey in 2021, I rarely sold honey worth Rs 15,000 per month, mostly within the state. However, when logistic companies started picking up parcels from our village and delivering them across the country, my business boomed." Now, Ahsan sells Rs 75,000-85,000 worth of honey monthly, with over 60% shipped to states like Maharashtra, Rajasthan, Uttar Pradesh, Delhi, Madhya Pradesh, and Haryana.

According to FastBeetle, over 2,000 MSMEs offering deliveries outside the region are registered with the company. Other logistics services used by small businesses for deliveries across India include Ecom Express and Delhivery.

The growth of logistics services has not only given a boost to local businesses but is also helping many apple farmers earn better by facilitating deliveries. The apple industry faced a setback when the government reduced tariffs on foreign apples, leading to an influx of apples from China, Iran, and the U.S. Despite foreign apples being of relatively lower quality in taste, Kashmiri apples had already built a strong reputation among Indian consumers. However, the increased competition diluted the market, significantly reducing the demand for Kashmiri apples and causing a steep drop in prices.

In response, many Kashmiri farmers have developed direct customer networks across different parts of India. These farmers now deliver apples straight to customers' homes, ensuring they receive authentic Kashmiri produce. This approach has allowed many farmers to secure better prices while providing consumers with high-quality apples, helping them recover from the market disruption caused by foreign imports.

A delivery boy double-checks the parcels to ensure they are meant for the residents of the area where he is assigned to deliver.

Mohammad Said, a 35-year-old apple farmer from Hutmud, Anantnag, said, "My family has been in apple farming for generations, but in recent years, apple prices dropped significantly, leading to heavy losses. However, the past 2-3 years have been very good for us. I’ve built a strong network of consumers and fruit vendors in Maharashtra and Bangalore, and I now deliver fruits directly to them through logistics companies, which has increased our earnings.”

Said ships 50-60 boxes each month. Each box, which earlier would sell for Rs 800, is now sold for Rs 1,400-Rs 1,500. The logistics cost of each box is Rs 120-Rs 130. Many farmers in our village are doing the same and making good profits." By delivering the fruits directly, Said's profits have increased 1.5 times compared to what they were before.

Not Without Challenges

While the logistics business has taken off in Kashmir, it comes with a host of challenges, including more costs — both monetary and human.

Among the major challenges is the Srinagar-Jammu highway, also known as NH-44, that has to be shut down during monsoon and winter seasons as it is extremely landslide prone.. Frequent landslides often cause significant delays in truck deliveries, leading to late arrivals and frustrated logistics partners in the region, who feel powerless about the issue. While cargo transport is an alternative, it significantly increases logistics costs, making it difficult to pass those costs onto consumers.

For instance, FastBeetle, which generates daily revenue of Rs 3-3.5 lakh per day, sometimes loses a full day's earnings due to landslides. Rashid explained, “These landslides, which are beyond our control, are severely affecting our company.” Not only does the company face financial losses, but delivery agents, who work on commissions per parcel basis, also suffer as entire workdays are wasted at times.

Amir Ahmed, the general manager at Delhivery warehouse in Achabal, said that the monsoon season is particularly frustrating for both delivery agents and consumers. This disruption adds to the challenges in an already difficult terrain.

Kashmir's harsh winters also make last mile deliveries difficult. Temperatures often drop as low as -5°C, with delivery agents navigating frozen roads on two-wheelers. While locals usually avoid this in such extreme cold, delivery agents have no choice but to ride in these dangerous conditions, putting their lives at risk.

An Ecom Express delivery agent, speaking anonymously, recounted facing two minor accidents last winter, one of which left him with a broken arm. While riding in the cold, his hands became numb, preventing him hitting the brakes on time, leading to an accident. Although locals quickly came to his aid, he emphasised that riding in the season’s harshest period, known as chillai kalan, is extremely dangerous, and urged companies to consider the risks delivery agents face during winter.

The delivery agent said that despite spending Rs 5,000 in medical expenses, he wasn’t compensated by the company.

However, Rashid said that their company, FastBeetle, provides accidental insurance for delivery agents in such situations. “I can't speak for others, but anyone who works with us and opens an account automatically gets accidental insurance,” Rashid explained.

Delivery agents work on a commission basis and are eager to reach an agreement with logistics companies, hoping to be granted the status of a full employee. They want to be treated like other staff members and receive employee benefits, such as partial pay during leaves based on performance, medical insurance, and other perks.

Expressing his frustration, the Ecom Express agent said, “These companies are nothing without the delivery agents and couldn't operate for even a day without us, yet we are treated the worst. Companies should give us employee status and offer benefits so we can feel secure while working for them.”

While logistic services for small items like clothes, electronics, and mobile phones are now easily accessible across all parts of Jammu and Kashmir, the situation is quite different when it comes to delivering larger goods such as refrigerators, washing machines, or furniture. These items, which require four-wheelers for transport, face logistical challenges due to the region's difficult, hilly terrain. As a result, there is currently a lack of services for larger deliveries, especially in rural areas.

However, logistics companies are actively working to address this gap. Samiullah shared that his company is preparing to launch a fleet of trucks specifically designed to deliver larger items to rural areas. This initiative aims to make the company the first in the region to provide such services, helping overcome the logistical challenges posed by geography.

"I understand that the terrain here is challenging, and it's difficult for companies to deliver larger products in our region," said Suhail. "But I believe once they start, they'll figure out a way to make it work. I'm hopeful that we'll soon have delivery options for items like washing machines and refrigerators, especially since they're so much cheaper online."