The e-commerce space has seen strong demand and supply-side shifts, in part due to increased online shopping in the wake of the COVID-19 pandemic. According to the ‘India E-commerce Report June 2022’, published by trade research services firm PGA Labs.
Additionally, more than 60% of the e-commerce logistics market is outsourced, leaving room for specialized logistics service providers (LSPs) and consolidators. D2C (direct-to-consumer) brand outreach and social commerce will be key drivers of growth.
India’s e-commerce retail market is expected to deliver around 15 million daily shipments, which is valued at around $145 billion by FY26. e-commerce retail logistics, which is also expected to grow at a CAGR of 24% to $6.3 billion in FY26 from $2.2 billion in FY21.
Operational efficiency has increased dramatically through automation, artificial intelligence, machine learning, data analytics, and the Internet of Things (IoT). Moreover, the reduction in the cost of technologies such as cloud computing, GPS trackers and IoT sensors is also allowing small logistics companies to modernize their systems, according to the report.
The increased use of digital payments has led to a decrease in the cash handling needs of language service providers. This has also led to a reduction in cash on delivery (CoD) transactions, which is seen as a challenge for logistics providers. However, infrastructural inefficiencies, high return rate and COD orders are some of the major challenges faced by LSPs when reducing the overall cost of e-commerce retail logistics in India.
The Indian logistics market can become more efficient with dedicated freight corridors, free trade warehousing areas, logistics parks and container freight stations. Government initiatives such as the National Infrastructure Pipeline, Sagarmala and the new National Monetization Pipeline are expected to boost the logistics market and help last mile delivery capabilities in India. Additionally, the National Highway Development Project aims to extend India’s current highway network by 2,000 km by adding 18,637 km of green highways by 2022, while the Bharatmala Project involves the construction of 83,677 km of motorways by 2024.
Fibre2Fashion News Office (NB)