Saturday, 17 February 2018
Tuesday, 13 February 2018
Dedicated LSPs gaining strong hold over traditional LSPs in e-commerce retail industry of India: Bonafide Research
Better
service, investment in technology infrastructure, wider range of product
offerings, competitive pricing, fundraise from global investor and their
ability to reimburse cash quickly has provided e-commerce focused LSPs to munch
bigger pie of e-commerce market as compared to the traditional LSPs.
The India e-commerce
logistics industry is growing at a rapid rate given the funding by global
investors. The e-commerce focused LSPs have gained huge traction in the last
couple of years, for example players like Delhivery and Ecom have already crossed
a revenue mark of Rs. 350 crore individually. These emerging LSPs providing
complete logistics solution to e-retail industry includes services like first
mile, last mile, COD collection, remittance, parcel tracking, etc. These e-commerce
focused LSPs are continuously adopting new technologies and constantly making efforts
to welcome new requirements given by e-commerce companies. Meanwhile, traditional
LSPs have an advantage of established network and reach, along with their
experience and expertise in providing logistics service pan India. But due to
lack of pattern followed to reach the client of e-commerce, along with the lack
of sales techniques and IT adoption, has put these traditional LSPs to lose
their ground on e-commerce logistics platform.
According to recently published
report of Bonafide Research 'India E-Commerce
Logistics Market Outlook, 2022' e-commerce logistics market has crossed a
revenue mark of Rs. 5,000 crore in FY 2016-17. Increasing e-retail industry has
augmented the demand of LSPs for distribution and reach. In distribution
channel, e-commerce package in India is handled by at least 18 people before it
reaches its final destination, whereas in a developed country a package would
be touched by about 3-5 people. Earlier to e-commerce, the domestic express
service market was largely unorganized and fragmented. The existing traditional
3PL players had limited capabilities to cater to time sensitive delivery and
service levels demanded by e-commerce players, which resulted into captive
logistics arms being seeded by the large e-com players. Maximum of deliveries
for Amazon and Flipkart are executed through their respective captive logistics
entities. In last 3-4 years, 3PL players have emerged to take advantage of
scale and efficiency through a technology first approach. Within the 3PL LSP
market, e-commerce focussed players like Ecom Express, Delhivery and GoJavas
have more than 30% market share. Both types of LSPs, captive and third party,
are looking to expand their capabilities through calculated investments. Also,
large e-commerce vendors have made strategic investments in other logistics
players in this critical market and have invested in start-ups too. In complex
categories such as furniture, jewellery and grocery, e-commerce players still
largely rely on captive logistics.
Report Link: Click Here
In e-commerce logistics, last
mile and line haul contribute major part of the logistics cost for players. Major
part of line haul is by air due to time sensitive nature and service
commitment. E-commerce growth over the next 5 years will be driven by demand
from tier-II cities and beyond. Shipment volume will increase majorly in the
forecast period. The challenge is that the demand from tier-II cities and
beyond will be highly disaggregated because it will be originating from more
than 4,500 small cities and town. Building a scalable and efficient logistics
network for such scattered demand and supply will require innovative business
models from logistics players.
Companies in this report are
divided into three sections: Gati Limited, Blue Dart Express Limited, FedEx
Express Transportation & Supply Chain Services (India) Pvt. Ltd., Safexpress
Private Limited, Future Supply Chain Solutions Limited, First Flight Couriers
Limited, Aramex India Private Limited and Indian Postal Services are major traditional
logistics service providers in India. Major companies in e-commerce focused
logistics service provider include Delhivery Private Limited and Ecom Express
Private Limited whereas Instakart Services Private Limited - Ekart and Pigeon
Express Private limited - GoJavas are major captive logistics arms in India.
Report: India E-Commerce Logistics Market Outlook, 2022
Base Year: 2015-16
Estimated Year: 2016-17, Forecast
Year: 2021-22
Pages: 122, Figures:
21, Tables: 32
Contact Us
Bonafide Research &
Marketing Pvt. Ltd.
Steven Thomas – Sales &
Marketing Manager
Telephone: +91-265-2331309/ +91-7878231309
Monday, 12 February 2018
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