 "India's e-commerce logistics space to exceed 10 bn parcels by FY28: Redseer")
India’s e-commerce logistics space to exceed 10 billion parcels by FY28 as it rides on new categories, and direct-to-consumer (D2C) brands along with growth in Tier 2 plus cities, according to a report by Redseer Strategy Consultants. The total shipments (forward plus reverse) for e-commerce logistics grew to 4 billion in FY23 (excluding hyperlocal shipments). Within this pie, in-house logistics versus third-party players had a roughly equal share.
“During the course of the year, the industry saw intensifying competitive trends from smaller incumbents with yields also being challenged,” said Redseer report. “However, despite this, the market is an attractive long-term bet with the overall e-commerce logistics opportunity to grow at a minimum CAGR of 20 per cent to comfortably exceed 10 billion parcels by FY28 on the back of steady e-commerce growth,” the report added.
D2C has emerged as a strong growth segment within e-commerce. Redseer said D2C brands across channels are expected to grow overall GMV (gross merchandise value) at 35 per cent in the next few years, with brand.com accounting for a significant share of this growth. A total of $ 33 billion of GMV is expected to be generated from D2C brands across all channels by CY27.
Redseer said logistics players with relevant and customized offerings for D2C brands are well-positioned to capture market share in this high-growth segment. They are also expected to have a stronger yield profile going forward.
“Despite funding headwinds in e-commerce and Internet sectors, there are multiple pockets of high growth and high-yield opportunities available for e-logistics players, be in D2C or large goods or non-e-commerce segments,” said Mrigank Gutgutia, Partner, Redseer Strategy Consultants.
Despite intensifying competition threats, logistics firm Delhivery remains the clear market leader in FY23 within e-commerce 3PLs (third-party logistics) parcels-as per Redseer data. Its wide set of offerings for D2C brands along with its fast-growing non-e-commerce business also makes it better insulated from the recent macro trends in the e-commerce space and a more resilient logistics business overall.
“Players who build robust capabilities and offerings to serve this demand effectively will fundamentally be more resilient in these challenging times and will be better positioned for long-term market share and yield leadership,” said Gutgutia.
- E-commerce logistics space riding on new categories, D2C brands along with continued growth in T2+ cities
- FY23 eLogistics market saw intensifying competition and some pressure on yields from e-commerce players
- Delhivery remains the largest player in the e-logistics by a comfortable margin
- It is also more insulated from recent e-commerce pressures vs peers given their significant non-e-commerce clientele exposure