India’s e-logistics sector is predicted to become a $9 billion dollar industry from the $2 billion market size in FY21, according to Redseer Strategy Consultants.

Talking about the reasons driving this compound annual growth rate of 35 per cent, the consulting firm said, “Proliferation of smartphones and localization of the internet in non-English languages is drawing in new consumers from non-metro locations into the internet economy and creating new demand for online commerce, thus paving the need for disruption in logistics.”

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The report added that new models such as D2C (direct to commerce), social commerce, and video and influencer-based commerce are creating new touchpoints and drawing in new consumers to the market. The availability of multiple payment options such as UPI, no-cost EMI, BNPL, etc. has also further driven the adoption of digital commerce by more consumers, creating a need for e-commerce logistics. 

“With India’s booming e-commerce sector and the growing number of online shoppers, the number of e-commerce logistics shipments is expected to grow by four times in the next five years. It is safe to say that e-commerce logistics players should brace themselves for exciting days ahead,” the analysts at Redseer wrote.

E-commerce shoppers and shipment volume from Tier 2 and beyond cities have also grown to $650 million in FY21 as compared to $420 million in FY20. Multiple segments in the Indian logistics market are addressable by full-stack tech-enabled logistics service providers. There seems to be great headroom for growth as tech-enabled logistics players venture into adjacent segments such as hyperlocal delivery, express delivery, trucking, and more.

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