India’s e-commerce logistics sector is projected to exceed 10 billion parcels by FY28, says Redseer report

A recent report by Redseer Strategy Consultants suggests that India’s e-commerce logistics space will exceed 10 billion parcels by FY28, thanks to new categories and growth in Tier 2+ cities, and direct-to-consumer (D2C) brands. The report also revealed that the total shipments for e-commerce logistics grew to 4 billion in FY23 (excluding hyperlocal shipments). The in-house logistics vs. third-party players had a roughly equal share within this pie.

D2C brands emerge as a strong growth segment within e-commerce.

The report highlighted that D2C brands are a rapidly growing segment within e-commerce, and are expected to grow overall GMV (gross merchandise value) by 35% in the next few years, with brand.com accounting for a significant share of this growth. The report projected that a total of $33 billion of GMV will be generated from D2C brands across all channels by CY27.

Logistics players with relevant offerings for D2C brands are well-positioned to capture market share

Redseer suggested that logistics players with relevant and customized offerings for D2C brands are well-positioned to capture market share in this high-growth segment. They are also expected to have a stronger yield profile going forward. Mrigank Gutgutia, Partner, Redseer Strategy Consultants, stated that despite funding headwinds in the e-commerce and internet sectors, there are multiple pockets of high growth and high-yield opportunities available for e-logistics players, be it D2C or large goods or non-e-commerce segments.

Delhivery remains the clear market leader in FY23 within e-commerce 3PLs parcels

According to Redseer data, logistics firm Delhivery remains the clear market leader in FY23 within e-commerce 3PLs (third-party logistics) parcels. Delhivery’s wide set of offerings for D2C brands, along with its fast-growing non-e-commerce business, make it better insulated from the recent macro trends in the e-commerce space, and a more resilient logistics business overall.

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 and yield leadership.

Despite intensifying competition threats, the report suggested that players who build robust capabilities and offerings to serve this demand effectively will be more resilient in these challenging times and will be better positioned for long-term market share and yield leadership.

Conclusion

In conclusion, Redseer’s report suggests that India’s e-commerce logistics space is expected to grow at a minimum CAGR of 20% to comfortably exceed 10 billion parcels by FY28, thanks to new categories, D2C brands, and growth in Tier 2+ cities. Logistics players with relevant and customized offerings for D2C brands are well-positioned to capture market share in this high-growth segment and are expected to have a stronger yield profile going forward. Despite intensifying competition threats, logistics firm Delhivery remains the clear market leader in FY23 within e-commerce 3PLs parcels and is better insulated from the recent macro trends in the e-commerce space, making it a more resilient logistics business overall.