With the outbreak of the covid-19 pandemic brands across the industries are realigning their strategies to focus more on e-commerce, giving third-party logistics players such as Delhivery, Ecom Express, Xpressbees scope to grow.
According to a report released by consulting firm RedSeer this week, 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 fulfil 3 billion shipments by 2024.
The report suggests that the e-commerce shipments in the country 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.
Now as the nation is battling a second wave of the COVID-19 pandemic, brands have renewed their digital strategies.
RedSeer report highlights the renewed strategies which are 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.
These trends are likely to push e-commerce growth to up to $140 billion by 2025, said 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.
Further the report reveals that the rest 73% share 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.
