Delhivery trucking terminal at Bilaspur (Image: Twitter / @delhivery)
As brands across the industries realign their strategies to focus on e-commerce in the wake of the COVID-19 pandemic, third-party logistics players such as Delhivery, Ecom Express, Xpressbees are set out to gain.
According to a report released by consulting firm RedSeer on Monday, the companies, which currently account for 0.85 billion e-commerce shipments in the country out of overall 3 billion shipments (in 2020), are expected to fulfill 3 billion shipments by 2024.
E-commerce shipments in the country, the RedSeer report says, are slated to grow four times to 12 billion by 2024.
Several FMCG majors and retailers had introduced direct-to-consumer channels last year as the offline channel witnessed low footfalls and faced supply-chain constraints due to the pandemic. Companies such as Marico, Britannia, Godrej Consumer Products tied up with hyper-local delivery apps.
Eventually, the FMCG market reported over 7% growth in the fourth quarter of calendar year 2020 (Q4) as compared to 0.9% in Q3 and -19% degrowth in Q2, according to market researcher Nielsen. With the country battling a second wave of the COVID-19, the brands have now renewed their digital strategies.
RedSeer report, too, lists factors such as increased adoption of online platforms due to the pandemic, expansion of e-commerce to tier II and beyond cities, and growth of new segments as demand-side drivers of this surge. Backed by these trends, e-commerce is expected to grow to up to $140 billion by 2025, as per the consulting firm.
The third-party logistics players also increased their share in the e-commerce market last year due to pandemic-fuelled demand.
“3PL share grew to 27% in 2020 from 22%, due to sudden spike in demand after COVID-19, especially, for e-grocery and e-tailing which could not be handled only by captives,” says the report.
“This sudden growth is expected to stabilise at 25% in the next four years,” it adds.
The rest 73% share, the report reveals, is commanded by captive logistics arms of e-commerce companies. Flipkart and Amazon through their respective captive arms — Ekart and ATS — have the largest share in this market, according to industry reports. Of late, mobility players Rapido and Dunzo, too, have entered the segment and are offering hyperlocal solutions to brands.