The core team which built a multinational courier delivery services company, spun of TCI XPS, an express delivery service, in 1996. Starting out with a Rs. 3 crore revenue in the first year, owing to the core team’s expertise and the reputation of the parent company – TCI, the company followed a simple approach of ‘following the customer’ to expand its operations and scale the business. Today, it has 650 branches in 400 cities. It’s goal going forward is to grow at double the rate of India’s GDP by catering to SMEs and large corporates.
TCI Express (then called TCI XPS) started operations in 1996, as the express division of Transport Corporation of India. The core team already had experience in starting up, having established a multinational courier delivery services company as a division of TCI for doing door-to-door services.
After six years, it was hived off into a separate entity in 1995. Therefore, though TCI XPS was started from scratch, in its very first year, it managed to clock Rs. 3 crore in revenues, thanks to the experience of the core team as well as the reputation of the parent company. Since the base was small, the revenues doubled the following year. “TCI, the parent entity, was a well-established company by then, having been in the business since 1958, and many of our customers trusted us to cover the last mile for them,” recollects PC Sharma, CEO and Whole Time Director.
The company was founded on the principal of ‘Follow the Customer’ and branches were opened according to their business needs. As a result, the company today has 650 branches in 400 cities across India. This is managed by nine regional headquarters and 48 controlling centers managing 704 districts with centralized management at the corporate headquarters in Gurugram, Haryana. The company also has partnerships with delivery agents abroad for international deliveries. TCI Express primarily focuses on express (courier mode) and air cargo (larger packages).
Getting the Fundamentals Right
Some of the basics that TCI Express put in place that has helped the company include focusing only on the core area it set out to service and building on it, and not enter areas TCI catered to.
The second was the investment in technology right from day one of operations. “All our offices were connected from the beginning and technology continues to be important for us,” explains Sharma. In fact, the company has allocated Rs 400 crores to modernize its hub centers and scale up its IT infrastructure.
The technology, ERP-enabled software developed by the in-house team of 50, also enables tracking of consignments, thus adding an element of transparency, and in-scan/out scan processes amongst others.
Third has been to train its employees with focus on the cross-cultural ethos of the country. This has enabled employees to be located anywhere and grow with the organization, as well as bring deep insights into how a region should be approached for better results. Its overall team strength is 2700, including on-the-rolls and contract employees.
The company recruits +2 pass outs or under graduates from tier IV or V cities as its junior staff and grooms them on the job and through structured training sessions. Availability of talent is, therefore, not an issue. At the functional level, it hires people with minimum 10 years of experience. MBA graduates are hired at the next level and trained to meet the company requirements.
Only two to three per cent of the overall market for freight transportation has been touched and there is much potential for all players to grow in the express segment,” PC Sharma.
“Nowadays we are facing resistance from our employees to go to different regions. So we have changed our policy and only transfer them to places within 50 km from their place of recruitment,” Sharma adds.
Growing with the clients through key account management and proactive MIS reporting has enabled the company to benefit as the clients grew but continued to remain loyal. “Our people sit in the offices of large customers, earning their trust through prompt servicing,” explains Sharma.
The company caters to SME as well as larger organizations across seven verticals – auto, pharma, electrical, electronics, FMCG, sensitive information as well as e-commerce – and touches 200,000 people. It has tried to ensure a balanced approach for all the segments.
It has been growing at 8-10 per cent year on year, and touched Rs 900 crores last fiscal in revenues. Cost control is a key focus area for the company to keep margins healthy.
One of the biggest costs the company incurs is on diesel. It is hard to pass this to the customer and so efficiency is the only way to address the fluctuating prices.
There is competition from the organized as well as the unorganized sector. Apart from ensuring quality of services, the company also has nurtured a culture of approachability, which builds customers’ trust as even senior management is willing to talk to customers and resolve their problems.
In a Growth Phase
Currently, only about two to three percent of the potential market has been touched, according to Sharma, because of which all players are able to grow. Secondly, GST has resulted in restructuring of warehouses, which had come up earlier to manage the different tax structures in different states. But now those are being dismantled, and managed centrally. This will further boost demand for express delivery services.
The company, which is listed, is targeting a growth of 15 per cent this year and hopes to maintain a rate that is double the GDP. It will be setting up more branches, touching 1000 by 2022. Manpower will be increased correspondingly and the centers modernized accordingly.
Founded in: 1996
Founder / CEO: PC Sharmaa
Focus: Express delivery
TCI Express’ Growth Strategy
- Technology driven right from the start, ensuring transparency
- 650 branches in 400 cities. Targeting 1000 by 2022
- IPO in 2016
- Rs 900 crore revenues in 2018. Targeting 15 per cent growth in the coming fiscal