India shipped 4 billion e-commerce parcels in FY23; to cross 10 billion in five years

The dramatic rise of online retail or e-commerce in India has also benefited allied industries, namely logistics. In the just-ended fiscal (FY23), India shipped over 4 billion e-commerce parcels, riding on the growth of both pureplay marketplaces as well as online D2C brands. “Within this pie, in-house logistics versus third-party players had a roughly equal share,” according to a study by Redseer Strategy Consultants. 

This shipment number is projected to surpass 10 billion in the next five years (by FY28), riding on growing e-commerce penetration in Tier 2+ towns, and the surge of D2C brands across sectors. "E-commerce has experienced significant growth in Tier 2+ cities. This can be attributed to the rising popularity of lower average selling price (ASP) platforms, which have acquired substantial market shares. Consequently, this surge in demand has led to a significant increase in shipment volumes in these cities," Mrigank Gutgutia, Partner at Redseer, told Business Today.

In 2022, horizontal e-commerce platforms, including Flipkart, Amazon, and Meesho, accounted for over 70 per cent of shipments. "They have been at the forefront of the market in regard to shipments," Gutgutia revealed.

D2C brands, meanwhile, are growing their share too. Those are expected to account for 35 per cent of the overall e-commerce GMV in the next few years. “A total of $33 billion of GMV is expected to be generated from D2C brands across all channels by 2027. As such, logistics players with relevant and customized offerings for D2C brands are well-positioned to capture market share in this high-growth segment,” Redseer explained in its report.  

Out of all e-commerce logistics players in India today, Delhivery remains the largest. The homegrown logistics unicorn is also more insulated from larger e-commerce pressures vis-a-vis its peers given its substantial exposure to non-e-commerce clientele. Besides Delhivery, the likes of Ecomm Express, Xpressbees, and Shadowfax, are also key players, Gutgutia told BT.

He further added, “Despite funding headwinds in the e-commerce sector, there are multiple pockets of high growth and high yield opportunities available for e-logistics players, be it in D2C or large goods or non-e-commerce segments and wider supply chain management (SCM) services. Players who build robust capabilities and offerings to serve this demand effectively will fundamentally be more resilient in these challenging times and will be better positioned for long-term market share.”

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