Rising Internet Penetration: Internet penetration in India is growing rapidly; it has reached close to 700 Mn in 2020 from 481 Mn in 2017. For the first time, India has more internet users in rural areas than in urban cities. A report by the Internet & Mobile Association of India (IAMAI) and Nielsen showed rural India has 10% more Internet Users than urban India, as of November 2019. This has translated into boost in Online Shopping Orders from Rural India leading way for growth of the E-commerce Logistics Industry in the Region.
Impact of COVID on E-commerce Logistics Market: COVID-19 led to a rise in the number of first-time-ecommerce-users in India, who had been so far inhibited to shop online. Demand for Essential Products such as FMCG or Pharmaceutical in comparison to other products witnessed a rise, leading to decline in rate of return/replacement shipments. Moreover, payment using cash on delivery mode decreased drastically owning to risk of infection.
New Technical Innovations and Business Models: Entry of Logistic Aggregators to help SMEs by catering to the low shipment demand at competent prices, emergence of innovative technologies such as secured lockers to reduce rate of return of shipments and digital addresses to ease last mile delivery services in a country like India with a poor mapping system proved to be highly helpful in catering increased consumer expectations regarding fast delivery services and higher availability of diverse products online.
Government Initiatives for the Industry growth: The introduction of the Goods and Services Tax (GST) in 2017 led to a positive effect on the E-Commerce logistics industry as it eased the movement of goods across state borders. In 2018, Central Government allowed 100% Foreign Direct Investment in market place model and 25% in Inventory Based Model. Moreover, various states such as Haryana, Punjab, West Bengal and more increased Government support in the start ups by providing them with rental/lease subsidy, they also increased their investment in E-commerce warehousing projects and several other segments of the Industry.
The report titled “Indian E-commerce Logistics Industry Outlook to 2025- Driven by Changing Shopping Patterns and Increasing Demand of Fast Delivery Services” by Ken Research suggested that the E-commerce Logistics Industry of India is expected to grow in the near future due to increased demand from Tier 2 and below cities owing to increased internet penetration in these areas. Moreover, changing shopping patterns, increasing requirement of fast delivery services and usage of AI, Big Data analytics, and Blockchain Technology to improve the customer experience will also play major role in the industry’s future growth. The Industry is expected to register a positive five year CAGR of 23.6% in terms of revenue during the forecast period FY’2020-FY’2025F.
Key Target Audience:-
Third Party Logistic Companies
Potential Market Entrants
Time Period Captured in the Report:-
Historical Period – FY’2015-FY’2020
Forecast Period – FY’2020-FY’2025F
United Parcel Service
For More Information on the research report, refer to below link:-
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Ankur Gupta, Head Marketing & Communications