Press Release / Industry / India E-commerce Logistics Market Overview

India E-commerce Logistics Market Overview

Lack of focus, IT adoption and aggressive sales strategies led the traditional Logistics Service Provider (LSP) to lose their ground against the e-Comm. focused LSPs.
The rise of e-commerce led to the rise in demand of logistics which were e-Commerce specific. Few start-ups entered this market to address the e-commerce logistics needs of the e-Tailers. They came up with timely logistics solutions, first mile as well as last mile solutions, COD collection and remittance, parcel tracking etc. When the traditional LSPs were following the traditional approach of waiting for the clients to come to them, these start-ups went to the e-Tailers with a prospect of partnering with them to take care of their logistics needs. Delhivery and Ecom express are two names among those start-ups.
These two companies collectively crossed Rs. 350 Crore mark last year. The traditional LSPs are still putting up plans to establish dedicated services for e-Tailers while on the other hand the new entrants are taking away the e-Commerce Logistics pie. Spite of having established infra structure, few year old firms surpassed the giants of Traditional LSP market.
According to recently published report of Bonafide Research “India E-Commerce Logistics Market Outlook, 2021”, the e-Commerce Logistics market is headed for a huge growth and is expected to cross Rs. 8000 Crore milestone by 2021. COD which is still an issue for e-Tailers still dominates the payment market, but slowly e-Wallets are gaining pace and they are expected to have market share closer to 20% by the forecasted period. The traditional LSPs have a very well established Logistics infrastructure and knowledge base in place. They should have provided complete solutions to e-Tailers; instead they have forced the e-Trailers to learn Logistics. Now, the e-commerce giants have their own captive logistics arms to serve their logistics needs and now catering their services to others as well.
In next few years, if the traditional LSPs do not convey their USPs, do not simplify their pricing and make it transparent, do not adopt IT infrastructure, and do not prepare aggressive sales strategies they might be losing their ground in growing e-commerce logistics market. These start-ups have made their mark on the logistics market as Tier 1 and Tier 2 cities are concerned. But their real test lies beyond this i.e. Other Tier 2 cities, Tier 3 and rural areas. In the upcoming years, the e-commerce business is expected to come from T3 & Rural India, the part where the traditional LSPs have their edge over the e-Comm. Focused LSPs. Moreover, the e-Tailers will seek for end to end logistics solution including warehousing where traditional LSPs have the required infrastructure. This is where the ability of e-Comm. Focused LSPs is in question. If the traditional LSPs act right now, they will race ahead of e-Comm. focused LSPs although chances seem quite less.
Major Traditional LSPs operating in this market are: BlueDart, Gati, India Post, FedEx, etc.
Major E-Commerce Focused LSPs operating in this market are: Delhivery, Ecom Express etc.
Captive Logistics Arms: Ekart, GoJavas, Amazon Transportation Services etc.