India’s e-commerce logistics market set to hit 28 10bn parcels by fiscal year: report

The e-commerce logistics market in India, which transported more than 4 billion packages in FY23, is expected to grow to 10 billion packages by FY28, mainly due to new categories, D2C brands and continued growth of Tier-2 and Tier -3 cities, according to one report.

The market is an attractive long-term bet as the total e-commerce logistics opportunity can grow at a compound annual growth rate (CAGR) of 20 percent to over 10 billion packages by FY28 based on steady e-commerce growth, states it in the report.

Redseer Strategy Consultants said in its latest report that the Indian e-logistics market will see significant growth in FY23. Total shipments (forward + reverse) for e-commerce logistics grew to over 4 billion in FY23 (excluding hyperlocal shipments). Within this pie, internal logistics and third-party providers had roughly an equal share.

“Despite financial headwinds in the e-commerce and internet sectors, there are numerous niches with high growth and high return opportunities available to e-logistics players, be it in D2C or large commodity, non-e-commerce segments such as C2C, PTL/ FTL and FTL or broader SCM services. Players who build robust capabilities and offerings to effectively meet that demand will be fundamentally more resilient during these challenging times and will be better positioned to capture market share and lead over the long term,” said Mrigank Gutgutia, Partner, Redseer Strategy consultants.

D2C as an opportunity

D2C developed into a strong growth segment within e-commerce. Across all channels, D2C brands are expected to increase their total GMV by 35 percent over the next few years, with accounting for a significant share of this growth. A total of $33 billion in GMV is expected to be generated by D2C brands across all channels by CY27. The report views the definition of D2C here as referring to online first new age brands from Indian gamers.

Therefore, logistics players with relevant and tailored offerings for D2C brands are well positioned to capture market share in this high-growth segment and have a stronger revenue profile in the future.

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