What happens in Digikala warehouses and processing centers?

Details of an advanced architecture

In Amazon, the most popular e-commerce giant, each worker packs about 110 products per hour, while Digikala increased this number to more than 330 products per hour.

It is brighter than the sun that effective logistics is a key factor to success in the online retail market. Digikala has managed to increase its sales and shipment volume up to tenfold during the past five years. In response to significant increase in orders, the company enhanced its order processing and delivery services several times over the years.

It is hard to believe that the first Digikala order processing centers (generation one) were only a four thousand square meters center established in Tehran and 20 small distribution centers in different cities. Today, there are about 530 Digikala infrastructure centers including 3 order processing centers in a big area of over 100,000 square meters. In some particular periods, for example during the COVID-19 pandemic, Digikala processing operations reached one million products per day. Let’s see how this largest online store of Iran scored these remarkable records!

Story of a great change

Up to 2016, Digikala followed a retail business model. Even until eight years ago, the defined mechanism was completely different: Digikala used to purchase the goods and warehouse them. The customers could only order the items which were available in stock. After placement of an order by a customer the merchandise was prioritized based on the determined delivery date, required processing and distribution time, and, shipment time and queued for order processing stage. The whole process consisted of shipment of the goods to the distribution centers and then delivery from the distribution centers to the customer’s places by drivers.

Nowadays Digikala has become the largest e-commerce marketplace in Iran through an outstanding experience. The change started when Digikala decided to open its platform to other suppliers and retailers enabling them to use all of the company infrastructures including its logistics. The retailers were able to register and have a panel on Digikala platform to introduce and sell their products. Considering all the benefits, however, this new mechanism requires a vast variety in business models. Moreover, the changing demands and tastes of both buyers and sellers leads to more complicated and costly logistic operations.

Productivity boost instructions

Collecting and stacking of the goods are always the most challenging and costly phases of the logistics operations all over the world. Imagine what it is like to sort, pack, and process hundreds and thousands of orders at a ten thousand square meters’ distribution center. The scenario in which a worker walks long distances in the warehouse to find and collect all of the items of each order is very expensive and not effective at all.

Currently, at Digikala warehouses, there are some particular zones in which the worker is in charge of a specific part of the goods processing such as picking up the items from a shelf, taking them to the conveyor, and transfer them to another part of the warehouse in which the order processing and accumulation would be done. The mentioned worker does not need to be informed about the orders details and his/her only task would be delivering some goods from one place to another. At the second zone the goods are grouped under individual orders and would be ready to dispatch. Furthermore, utilizing efficient sorting and packaging software and having a warehouse and distribution capacity as big as 927,000 items at Digikala processing center plays one of the main roles in keeping Digikala on the path of development, productivity, and improving time and cost management.

Digikala is the first online retail company in Iran to use a parcel sorter machine. “This device has brought a significant transformation to Digikala’s distribution and logistics network by greatly reducing order processing time.” said Masoud Tabatabaei, CEO of Digikala. “The machine processes and sorts 6,500 packages per hour ranging from 100 grams to 30 kilograms for 60 infrastructure centers. This is the capability of only one floor of parcel sorter machine, and if both floors are utilized, it can process up to 19,000 orders per hour.”

The parcel sorting machine now enables Digikala to categorize a large volume of packages in a very short time based on their destination. Reducing errors in categorization and lowering the cost of the order processing procedure are other advantages of using this device.

Businesses in the age of speed

These days, people cannot or are not willing to wait for long. Customers of online stores usually expect to receive their order on the same day that they make their order.

No need to mention that conventional grocery store chains and independents globally have embraced what is now referred to as “quick commerce.” Yet, the idea of quick commerce is still in its early stages in Iran. Moreover, one of the 4 key investment areas of Digikala is instant delivery, which is introduced as Digikala Supermarket brand and the company plans to turn it into a market leader.

Currently, determining and minimizing the required time for order delivery is a serious priority for Digikala, focusing on quick delivery of products.