The Future of E-commerce Logistics Market in India: Trends, Opportunities, and Challenges

Strong e-commerce growth in India has changed the country's corporate landscape. The e-commerce industry in India is being driven by the rising adoption of smartphones and the Internet and one of the major factor is country's population. The India e-commerce logistics industry is expanding as a result of the country's expanding e-commerce industry. The number of firms entering into the e-commerce business is growing at double digit rate and adoption of hybrid mode has surged after the virus outbreak.

On the basis of revenue Ecommerce logistics market grew at a CAGR of 39% from 2016-2021 reaching to USD 3,449.25 Million. Higher internet penetration, a surge in smartphone ownership, an increase in online shopping inclination, increased demand from Tier 2 and rural areas, technology advancements, technologically equipped warehouses, and rising consumer expectations for quick delivery services are some of the industry's major growth drivers.

Moreover, a drop in growth rate can be observed in the upcoming years as a result of the peak industry had witnessed during 2020 & 2021. Inspite of decline in growth rate industry will continue to experience positive growth in E-commerce shipment volume. Around 190 million people shopped online in 2021, up from 150 million in 2018.

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Road Freight Transport Dominates in India
The volume of road freight transport in India has increased by 4.3% in 2019 compared to the previous year. India's most important means of domestic goods transportation is by road.

Major Developments in India E-commerce Market
- Brand Stores Acting as Micro Warehouse
- Increased Automation for Efficient Last Mile Delivery
- Emergence of Hyperlocal Delivery Services
- Government Initiatives

Opportunity in Reverse Logistics
Reverse logistics has emerged as a lucrative opportunity surpassing freight forwarding in terms of profitability. Recent reports reveal that the Indian market is witnessing a surge in this segment, driven by the remarkable 30% return rate of goods sold on e-commerce platforms, as opposed to 8.8% in traditional retail stores. While the reverse logistics industry was largely unorganized until last year, the scenario has witnessed a shift as prominent e-commerce giants like Amazon and Flipkart faced challenges and expressed a preference for organized players.

Recognizing the immense potential in this space, Mahindra & Mahindra has made its foray into the reverse logistics domain, establishing warehouses in Mumbai and Bengaluru. This strategic move positions them to capitalize on the growing demand and seize the opportunities that lie ahead.

A Move Ahead from the Brick and Motor store
The digital buyer penetration in India in 2021 was approximately 28%, which is higher than the previous year. An increase in the number of online sales and growing trust in e-commerce platforms strongly support the numbers.
In India there was a tremendous increase in the online shoppers in 2021. While e-commerce sales were stunted at 8% during 2020 in India, compared to 20% in the US and China, e-commerce trends in India was growing steadily despite the COVID-19 outbreak. The Indian e-commerce market is now seeing big upsides in the number of online shoppers who are purchasing more online than ever before.

Internet Penetration in India
With the growth of the e-commerce market, the penetration rate of internet users is steadily expanding. The number of active users in India is expected to reach 900 million by 2025, depicting a nearly 45% increase as compared to 2020. This rise is due to higher adoption in rural India, with a mark of 299 million in 2020, which total accounted of 31% of the country's rural population.

Future Potential of E-commerce Logistics in India
The future of e-commerce logistics in India holds immense potential and is expected to undergo significant advancements. According to Makreo Research here are some key trends and factors shaping the future of e-commerce logistics in the country-

Growth of Last-Mile Delivery: Last-mile delivery, the final leg of the delivery process to the end customer, will continue to be a focus area. Companies are investing in technologies such as route optimization, automation, and alternative delivery methods like drones and autonomous vehicles to improve efficiency and reduce costs.

Expansion of Warehousing Infrastructure: The demand for warehouses and fulfillment centers will increase as e-commerce continues to grow. The expansion of warehousing infrastructure, including larger fulfillment centers, micro-fulfillment centers, and shared warehousing models, will be necessary to meet the evolving needs of e-commerce businesses.

Integration of Omnichannel Logistics: With the rise of omnichannel retailing, e-commerce logistics will become more integrated across online and offline channels. Retailers will aim to provide seamless experiences by leveraging their physical stores as pickup points, offering click-and-collect options, and enabling flexible return processes.

Emergence of Hyperlocal Delivery: Hyperlocal delivery services, enabling faster deliveries within a limited geographic area, will gain prominence. This trend will be driven by the need for instant gratification and same-day deliveries, particularly for essential items and perishable goods.

Collaborative Logistics Models: Collaboration among e-commerce players, logistics providers, and technology companies will increase to optimize efficiencies and reduce costs. Shared logistics networks, crowdshipping, and cooperative warehousing arrangements will gain traction.

The future of e-commerce logistics in India is dynamic and evolving. With technological advancements, infrastructure development, and a focus on customer satisfaction and sustainability, the industry is poised for significant growth and innovation. Embracing these trends and leveraging the expertise of research and consulting firms like Makreo Research will be crucial for businesses to thrive in the evolving landscape of e-commerce logistics in India.

Scope of the Study
Makreo Research has published a study titled "India E-commerce Logistics Market Performance and Future Outlook to 2027" is a detailed study that offers the reader to understand market performance from demand and service aspects. On demand aspect, it is important to understand performance of E-commerce market in India and its outlook and on supply aspect we have studied E-commerce logistics service providers and annual shipments. The study is a combination of qualitative and quantitative assessment of the industry covering micro and macro level of assessment of the economy and other independent factors that are highly corelated with the E-commerce logistics market of India.

Find out more:- https://www.makreo.com/report/india-e-commerce-logistics-market-report

COVID-19 Impact Assessment:-
The report helps the reader to understand the shifts happening in the E-commerce industry after the virus outburst also impact over the E-commerce logistics demand and services.

Market Assessment: -
The report examines the India E-commerce logistics market on several grounds including smartphone users in the country, online shoppers growth year on year, working female population, E-commerce shipments, mode of transportation and others. Report gives an understanding of India E-commerce logistics market performance in the past and during COVID scenario also it helps to comprehend future expected growth of the industry.

Trade Performance:-
This section gives an overview of the total trade transactions that have happened in the past in both domestic and international markets.

Company's Mentioned:-
Delhivery, Blue Dart, FedEx, DHL, DTDC, Aramex, XpressBees, Gati Ltd, Allcargo Logistics, eKart, Amazon Transportation

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Makreo Research is a market research and consulting firm working closely with business conglomerates worldwide to assist them in many aspects of driving their business growth and making wise decisions with the help of our qualitative & quantitative market insights.

This release was published on openPR.