India is one of the emerging markets across the world – and this is not only due to the diverse populations, but also due to various other social economic factors. The demand for the e-commerce industry is rising. The trend started somewhere during the 2010 and it grew in double digits YOY, and took a tremendous spike in the year 2020.
The expansion of government digital initiatives during the Covid-19, literally changed the consumer behaviours towards the Ecommerce industry. According to India’s e-commerce logistics report, in 2021, the size of the Indian logistics market grew by 4%, and it is expected to grow at a CAGR of 5% from 2022-27, generating market revenue of USD 633.6 billion by 2027. The future of Indian logistics Industry is expected to drive Fulfilments services, Warehousing, Surface mode of operations & Logistics Tech – and apart from that Reverse Logistics is expected to have a huge growth understanding the comparative growth in Tier II & Tier III geographic.
The major driving factors for the E-commerce logistics Industry:
Penetration of Governments initiatives:
Plenty of government’s initiatives has been activated over past years to encourage innovation, entrepreneurship, Digital payments etc. which has boosted the ecommerce industry. And over that it has given rise to the ecommerce logistics industry as well. Indian Government has launched the secured logistics document exchange programs along with the provisions for greenhouse gas emission to improve the ease of business, reduce cost, increase efficiency and facilitate various sustainability initiatives.
Adoption of Digitalization:
Indian market, especially Tier II, Tier III and interior pats of the nations has started accepting & consumed the digital ecosystem – which has largely boosted the Ecommerce industry. From suppliers, manufactures, traders, dealers and even the Kirana’s are embracing a digital, computerised & automated supply chain through various Tech driven platforms. And this has become a new norm from past 2 years, for even small retail players which has changed the way how market used to look at the Supply Chain. Indian Consumers are increasingly adopting digital technology, which in turn creating a lucrative & fascinating markets for Ecommerce Logistics Industry.
Post pandemic effects:
World economy was under threat during the pandemic of Covid-19, but Indian Ecommerce logistics industry was out of the Radar of the outbreak. The situation had a positive impact on the industry & logistics players took various actions to have a seamless operations in such a bad condition. In order to maintain the business continuity, logistics players have penetrated to the small towns resulting to an increase in volume base and sustaining the business later. Moreover to reduce the danger of infection, e-commerce logistics players have highly took the advantage of Technology, like contactless delivery, online transactions etc.
Marginal Youth Population:
The major factor that has driven the growth of the ecommerce industry is due to the diverse youth population in India. India is placed 5th in the world’s youth population. This ideally create a huge demographic dividend for the nation and helps it to achieve the USD 5 trillion economy objective. The large youth base, offer a great market & workforce to the ecommerce logistics industry. The youth are the drivers for entrepreneurship, Innovation and diversity. India has more than 55% of the population below the age of 25, and which is largely a great market for any lucrative business like E-commerce Industry.
Improvement in IT Infrastructure & usage of Smartphone users:
With a large base of youth population, India is expected to have an 800+million smartphone users by the end of 2022. Rural India witnessed a 35% YOY growth in 2020. Smartphone usage in rural India has risen to 25% in 2020 from approx. 9% in 2015. With a huge penetration of mobile technology, infrastructure developments, it most likely that ecommerce will also grow in parallel at a greater ace, giving an edge to the ecommerce logistics players to grow as well.
