India E-Commerce Logistics Market Performance and Future Outlook (2016-2027)

Overview

Executive Summary

India E-Commerce Logistics sector has reported a strong recovery after the first wave of COVID-19 that hit operations worldwide during the first two quarters of 2020. India's corporate landscape has transformed as a result of the country's rapid e-commerce expansion. The increasing use of smartphones and the Internet in India is driving the growth of the e-commerce sector there, and one of the key drivers is the size of the nation's population. The growing e-commerce market in India is driving growth in the country's logistics sector. On the basis of revenue, India's E-commerce logistics market grew at a CAGR of 39% from 2016-2021. After the virus outbreak, an increase in hybrid mode usage resulted in an increase in the number of businesses entering the e-commerce market.

The number of e-commerce consumers increased to more than 40% of India's urban active internet users between June and August 2020. From Tier 1 and Tier 2 cities, nearly half of these are first-time internet shoppers. The two websites that new customers prefer to use for discovery are Amazon and Google. Prior to the viral outbreak, only 22% of India's urban active internet users had engaged in any online purchasing.

With e-Commerce being one of the most in-demand industries during the pandemic, there was a significant increase in the daily volume of orders submitted throughout India. The logistics company delayed the delivery of the items as a result of the additional requests. Due to the nationwide lockdown and the fact that e-commerce typically uses third-party logistics, this market was also experiencing severe labour shortages and supply chain disruptions, which resulted in expensive and delayed deliveries.

With various online retailers expanding their services during COVID-19, eCommerce in India is rapidly developing, especially in comparison to global powerhouses such as China. High internet penetration rates, increased ownership of digital devices, increased income, improved logistical advancements, and the growing presence of global and recognised players have all contributed to the growth of eCommerce in India, bringing variety and availability to local consumers amidst the pandemic.

India Economic Performance
The India is a developing, middle-income nation having nominal GDP, it is the fifth-largest economy in the world, and by purchasing power parity, it is the third-largest (PPP). Prior to the outbreak of the virus, the nation's GDP was expanding at a rapid clip. The country's GDP increased by 7.6% in FY 2017–18, although the virus outbreak caused a setback for the economy, despite that India the Indian economy increased at 9.5% in 2021, after witnessing a GDP growth rate of -7.3% in 2020. While the inflation rate from January through November 2021 was 5.09%.

COVID-19 Impact: The COVID-19 outbreak has fuelled the rise of the e-commerce logistics sector. The E-commerce logistics players took several actions to maintain seamless operations at a difficult period when the supply chain was affected by prolonged lockdowns in a few other countries. There was a significant increase in demand for 3PL and notably E-commerce logistics services as a result of many companies adopting hybrid models to better serve customers and offset losses.

Market Segmentation

By Mode of Transportation: Road transportation dominates the Indian e-commerce logistics business with a market share of more than 60%, followed by railways, sea transportation, and air, which each have a lower share of the market but are important for international exports. In India, one of the most crucial facets of the logistics industry is transportation.

By Distributional Channel: In India eCommerce logistics market organization sector accounts for the largest market share. In addition, start-ups typically have a lot of cash to burn, which leads to a wider market reach and faster turnaround time. Some of the leading players in India E-Commerce Logistics market are Delhivery, Blue Dart, FedEx, Ekart and DTDC.

By Geography: Metro cities in India accounts for more than half of the share in the market but demand for rural areas and small towns has also seen an upsurge in recent years and this segment of the population is attracting interest of investors and so as E-commerce retail service providers. The major challenge is reach and warehousing that can be dealt by collaborating with channel partners in small towns, players are rapidly taking initiative to overcome this challenge. Therefore, in coming years the market of Tier I and Tier II is expected to outperform.

By Activity: The transportation sector accounts for 70% of the E-Commerce logistics market in India, followed by the warehouse sector. The warehouse industry must be developed despite the fact that a sizable percentage of it is unstructured and lacking in modern technology. Another area of logistics that lacks advanced cooling systems, affordable maintenance, and is heavily labour-intensive is cold chain logistics, whereas Indian warehouses underperform by international standards.

Future Growth: The India’s burgeoning eCommerce business has attracted some of the world's biggest eCommerce companies. This has aided in the transformation of the online purchasing culture in India. Cutting-edge technology has gained wide attention of internet shopping in locations like Tier I and Tier II. Moreover, the increasing number of migrant populations, rising cross border purchase and low shipping cost is expected to drive the future growth of India eCommerce Logistics market.

India Revers Logistics: Reverse logistics is the process of having customers return their purchases to the manufacturer or merchant. Particularly in online retailing, the overall returns management procedure is becoming more and more important. This includes both the movement of items back to the relevant warehouse, fulfilment centre, or manufacturing facility and their re-entry into the supply chain. After an on-site quality check, the products are either recovered, processed, or made functional again. If the damaged object cannot be fixed, it is disposed of properly.

Scope of the Study
Makreo Research has published market research analysis on E-Commerce logistics in India report titled, "India E-commerce Logistics Market Performance and Future Outlook to 2027" published by Makreo Research and Consulting.

The report delves deeply into various parameters such as Market size, segmentation value chain analysis, and industry cause and effect analysis. The study includes market dynamics that provide an understanding of industry opportunities, driving forces, major challenges impeding growth, and an analysis of future opportunities that may help market players capitalise on untapped business potential in the specific geography.  India E-Commerce Logistics Segmentation has been carried out on various levels. India e commerce logistics pdf is the detailed assessment of the industry’s past, present and future expected performance.

India E-commerce logistics report covers below mentioned segmentation

• India eCommerce Logistics Market
  • By Mode of Transport
    • Road
    • Rail
    • Sea
    • Air
  • By Player Type
    • Organized
    • Unorganized
    • E-tail
  • By Activity
    • Transportation
    • Warehouse
• India Reverse Logistics
   

Companies covered in the India e-commerce logistics report