India’s e-commerce logistics set to handle 10B parcels by 2028, signifying remarkable growth.
India’s e-commerce logistics industry is experiencing tremendous growth and is expected to handle a staggering 10 billion parcels by 2028, a significant increase from the current 1.5 billion parcels. The growth is attributed to the rapid expansion of India’s e-commerce sector, which has resulted in an increased demand for dependable and effective logistics services, making logistics a crucial component of the e-commerce ecosystem. The industry comprises a diverse mix of organized and unorganized players, ranging from large logistics firms to small courier companies, resulting in inefficiencies such as high logistics costs, inadequate service quality, and inefficient last-mile delivery, which have impeded the growth of the e-commerce sector. However, with the government’s focus on digitization and the emergence of new technologies, the e-commerce logistics industry in India is poised for transformation in the near future.
The e-commerce market in India is witnessing remarkable growth, with projections suggesting that its worth will surge from $38.5 billion in 2017 to $200 billion by 2026. This surge is attributed to several factors, including increased internet penetration, widespread adoption of mobile devices, and the government’s efforts to promote a cashless economy. Furthermore, the COVID-19 pandemic has accelerated the shift towards e-commerce as more people prefer to shop online to minimize contact and avoid contracting the virus.
The adoption of advanced technologies such as automation, robotics, and artificial intelligence (AI) is another major contributor to the sector’s growth. These technologies are anticipated to enhance efficiency, lower costs, and improve delivery times, facilitating logistics companies to handle a substantial parcel volume. For instance, firms like Flipkart and Amazon are experimenting with drone deliveries, which can enable them to reach remote areas while reducing delivery times.
The e-commerce logistics sector in India is experiencing significant growth due to various factors, including the government’s focus on digitization. The introduction of the Goods and Services Tax (GST) in 2017 has simplified the process of moving goods across state borders, leading to the consolidation of the logistics industry. Furthermore, the government’s initiatives, such as the e-Way Bill system, have reduced paperwork and improved transparency in the logistics sector.
According to Ankit Gupta, an industry expert and director of ExportersIndia.com, companies are investing heavily in technology and infrastructure to meet the growing demand for e-commerce logistics. This has resulted in the development of advanced warehouse management systems, route optimization tools, and last-mile delivery solutions. Additionally, companies are adopting innovative delivery models like hyperlocal delivery, locker-based delivery, and drone-based delivery to enhance their services’ efficiency and cost-effectiveness.
Flipkart, owned by Walmart, is one of the prominent players in the Indian e-commerce logistics sector. The company has been making significant investments in its logistics infrastructure and has established more than 160 warehouses throughout the country. Moreover, Flipkart has launched its own logistics subsidiary called eKart, which offers end-to-end logistics solutions to its clients. By reducing its delivery time to 1-2 days in most parts of the country, Flipkart has become one of the most dependable and efficient e-commerce platforms in India.
Amazon is another significant player in the Indian e-commerce logistics sector, having invested more than $5 billion in its Indian operations. It has set up 60 fulfilment centres across the country and introduced its logistics arm, Amazon Transportation Services (ATS), which offers logistics solutions to third-party sellers on its platform. Amazon has made notable progress in reducing its delivery time to as low as 2 hours in certain cities, making it one of the most convenient e-commerce platforms for customers.
The Indian e-commerce logistics sector is not only dominated by Flipkart and Amazon, but there are also several other significant players such as Exporters India, Snapdeal, ShopClues, and Paytm Mall. These companies have also been investing in technology and infrastructure to enhance their services’ efficiency and reliability. Furthermore, there are many logistics startups such as Delhivery, Rivigo, and BlackBuck that have emerged in recent years and have been disrupting the traditional logistics industry with their innovative solutions.
However, despite the growth in the e-commerce logistics sector, there are still many challenges. One of the most significant challenges is the lack of proper infrastructure, particularly in rural areas, where many parts of the country still lack proper roads and transportation facilities, making it difficult for logistics companies to deliver packages on time. Additionally, the sector faces challenges such as theft, damage, and pilferage of packages, which can lead to delays and customer dissatisfaction. To overcome these challenges, the government has launched several initiatives such as the National Logistics Policy that aims to create a single-window e-logistics marketplace and reduce logistics costs. The government has also been investing in infrastructure development, including the construction of new airports, highways, and railways, which will improve transportation facilities across the country.
(This article is written by Mr Ankit Gupta is the Founder, Director of Exporters India, and the views expressed in this article are his own)
