Overview Of
E-Commerce Retail Industry Of India
The E-commerce retail market in India has grown
by leaps and bounds from its nascent state in the mid-2000s to its current
market of ~ USD billion worth of transactions in FY’2020 at a gross level
before returns and rejections. Strong government initiatives coupled with
reducing prices of Smartphone and data plans by telecom service providers have
led to an increase in adoption of internet amongst new users.
Consumer behavior has also evolved wherein
e-commerce initially was more of a heavily discounted market place, to today -
where many users are seeking convenience of ordering products from the comfort
of their homes, rather than visit physical stores.
Other key industry trends include the rapid adoption
of Indian regional languages by retailers, significant investments in digital
channels such as digital wallets, frequent mergers and acquisitions and more.
Overview Of
E-Commerce Logistics Industry In India
The E-commerce
Logistics sector in India is at a late growth stage and
has evolved as an organized market structure.
The Industry has flourished owing to increased
internet penetration coupled with changing Consumer shopping preferences from
physical stores to online market places from the comfort of their homes.
The E-commerce Logistics Industry has grown at a
CAGR of 24.3% on the basis of revenue and a CAGR of 27.4% on the basis of
number of shipments over the period FY’2015-FY’2020.
Major growth drivers of the Industry are higher internet penetration, increase in number of Smartphone users, increasing propensity to purchase online, growing demand from Tier 2 and below cities, new technological innovations in the field of data Analytics, IoT, Bid Data, Artificial Intelligence, automation and more, rising consumer expectations for fast delivery services and more.
India E Commerce Logistics Market Segmentation, FY’2020
By Domestic/
International Shipments
E-commerce Logistics market of India is skewed towards Domestic
Shipments. For International Shipments, Indian merchants prefer mostly selling
online to countries such as US, UK, India, Russia and Israel
By Type of
Player
In House Logistic
players such as ATS, E-kart etc. cater generate larger Revenue in comparison
with third party logistic players such as Blue Dart, FedEx etc. in India.
By Payment
Mode
Most of the people in India still prefer to
pay cash on Delivery rather than use prepaid services like digital wallets.
People residing in Metro and Tier 1 cities usually prefer prepaid shipments
while Tier 2 and below population still have COD shipments.
By Major Product Categories
Electronics
(Mobile phones, Large Appliances, etc.) and Apparel (Clothing, Accessories,
Foot wares, etc.) comprise the largest market share in E-commerce Logistics
Industry of India.
While
electronics have the least return rate, products under the Apparel category
have highest rate of return.
By Delivery Time
Majority
of e-commerce shipments in India take two-four or more days to deliver. Especially
product categories like furniture, large appliances and more take greater time
to reach consumers in comparison to other products such as Food and Beverages,
Apparels, etc.
By Cities
Majority of online demand in India comes from Metro and Tier 1 cities owing to large internet penetration in these areas. Delhi/NCR, Bangalore and Mumbai are the top three cities with largest shipments in India. Tier 2 and lower Cities is the new emerging segment in the country and will see a high growth basis Shipments delivered in next five years in India.
By Product Return Rate
Indian
population still returns/replaces many of its products bought online due to
most common reasons such as wrong item received or product not matching.
Clothing, Footwear, etc. are the products with highest rate of return in India.
Major Trends Observed in the Industry
E-commerce
Logistics Industry of India is witnessing various new developments which are
leading to its high growth in the country. Some of these developments are
listed below:
Emergence of secured lockers: Several logistic
companies have started providing parcel lockers facilities to collect and receive a parcel as per customer convenience.
Entry of
Aggregators: In the past decade, several players such as Shiprocket have entered the market to
cater to small scale E-commerce Logistic companies in India.
Rising
demand of hyper local Deliveries: India
E-commerce Industry is witnessing an increasing demand of hyper local
Deliveries especially after COVID-19.
Major Challenges
faced by the Industry
E-commerce Logistic Players in India still face
several challenges in the country. Couples of these challenges are listed below:
High Rate
of Return: ~% of the total online orders are replaced or returned in India and
hence have to go through reverse logistics putting extra pressure on the
logistic companies.
High Cost of Last Mile Delivery: Last-mile delivery remains to be the significant pain point in logistics. ~% of the total logistic cost is spent on Last Mile Deliveries owing to poor transport infrastructure in the country.
Competition Overview
The E-commerce Logistics Industry of India is quite concentrated with presence of 10-12 major players in
the market. Top 2 players namely
E-Kart and ATS capture more than 60%
market share. Companies
in this space battle against each other to acquire and retain clients, expand
geographical presence, expand service offering and improve unit economics to
increase margins. Worth of Mouth and Reputation play an important role in
expanding client base in this industry. Delivery Cost, Delivery Time, Network Coverage,
Brand Value, Technology Stack, Success Rate are some of the competing
parameters each company focuses upon to gain customer trust.
Future Outlook of E-Commerce Logistics Industry
In India
The E-commerce
Logistics Industry is expected to flourish in India with rising demand from
Tier 2 and below cities (owing to higher internet penetration) and increasing
consumer expectations for fast delivery services. This industry is expected to witness
a CAGR of 23.6% in terms of revenue during the forecast period FY’2020-FY’2025F.
Ongoing technological disruptions such as Monitored Robots, Drones, Inbuilt RFID, GPS, IoT, telematics and more which help in tracking Inventory and deliver products on time will gain higher traction in future. Expansion of Fulfilment Centres in Tier 2 and below cities will increase to better serve the population in these areas by offering speedy delivery of all the products including large parcel sizes.
Key Target Audience:-
E-commerce
Companies
Third
Party Logistic Companies
Potential
Market Entrants
E-Retailers
Time Period Captured in the Report:-
Historical
Period – FY’2015-FY’2020
Forecast
Period – FY’2020-FY’2025F
Companies Mentioned:-
ATS
E-Kart
Delhivery
Ecom
Express
Bluedart
Xpressbees
DTDC-Dotzot
Shadowfax
Safeexpress
United Parcel Service
Gati
Go-Javas
DHL
Fedex
Aramex
For More Information on the research
report, refer to below link:-
India
E-Commerce Logistics Market
Related Reports:-
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
No comments:
Post a Comment