Why digitization of addresses in India is imperative for businesses

“It’s the first right after the garage, come to a dead end, yes, House behind the temple. Can you see the car? White car! What can you see now?”

- No Indian is immune to this daily navigation problem!

The problem of addressing is a result of bad zoning and planning policies followed by the inability to enforce the same. Rapid growth of both rural and urban India has resulted in broken addressing systems. There is no singular format even within the same city or in most cases there are no addresses (rural India). One of the prime reasons is that street naming is a highly political subject and as a result only about 5% of India’s streets have names. Though India has a Pin code system, the average area of a pin-code is over 150 sqkm, making it hard and highly inefficient for planning and modeling service delivery.

The global location-based services industry is estimated to grow at about 26% CAGR and pegged to hit over 180$B by 2027, India is at the vanguard of this growth with an estimated growth of around 30% CAGR. Covid-19 has further increased this growth rate and expedited adoption of location based services and delivery to the hinterland.

It is estimated that India annually loses anywhere between $17-$20 billion USD as a result of inefficiencies due to bad addresses just in the e-commerce, Logistics, Surface Transport, BFSI, Emergency Services, Property Taxation and Manufacturing industries, that is a significant portion of the GDP. For instance, margins in the e-commerce and logistics industries are razor thin and it is estimated that efficiencies could be in the tune of 60-70% as a result of moving from Pin code or locality based operations to accurate addresses.

Bad addresses directly impacts efficiencies and the bottom-line for many location dependent service providers, many companies invest into building their own address finding tools in silos by leveraging GPS, geo-coding services and some machine learning tools to help them predict the location of an address (like finding a needle in a haystack), there is varied improvement in efficiencies and quality of service delivery however all agree that India needs a record of truth for addresses, without which we will continue to invest into band-aid solutions. This lack in addressing infrastructure and cost of logistics going higher (fuel, delivery personnel, new area logistics, low delivery capacity/volumes), growth in this area will continue to be challenging especially to service the next billion users in the smaller cities and villages where addresses are more or less non-existent.

India needs a gold standard in addressing, which is able to sequentially number streets, properties and clearly articulate access points to ensure service delivery to the doorstep thus creating efficiencies across all industries. The system should be able to account for rapid growth, new areas, mutations and work from a Dharavi to a Lutyens Delhi encompassing all of India’s topography. This will empower and enable both existing and new businesses to further invest into making service delivery possible to the next billion users.

Perhaps industry consortiums could form (logistics, manufacturing, BFSI, etc) to get together and push policy or perhaps co-invest in creating this infrastructure, taking cue from how German automakers (VW, Mercedes and BMW) got together to co-own Here Technologies (a major LBS/Maps player), thus creating a common maps and navigation technology that enables all of them to succeed instead of rotting in silos.

The article is authored by Parikshith Reddy, Cofounder, Zippr