With the boom in e-commerce, growing GDP, and rising domestic manufacturing and consumption in India, logistics is a rapidly emerging sector growing at ~10%+ CAGR and is expected to reach ~ USD 470 billion by 2025.
Over the last few years, the country has witnessed a significant evolution in the express logistics sector, especially in the last-mile delivery ecosystem. The key players, including unicorns and budding startups, are all consciously taking effective measures to build innovative solutions and transform the way goods are transported and distributed across the country while keeping the end consumer (consignee) in mind. With the boom in e-commerce, growing GDP, and rising domestic manufacturing and consumption in India, logistics is a rapidly emerging sector growing at ~10%+ CAGR and is expected to reach ~ USD 470 billion by 2025. Moreover, Express Logistics is outperforming and growing at 20-25% CAGRs and a 35% growth in the number of e-commerce shipments year-on-year. Evidently, there is a shift in the mix towards 65% e-commerce, B2C/D2C and 35% B2B contribution.
With the rise of e-commerce, the emphasis on speed, reliability, 360-degree visibility, transparency and convenience is imperative to meet the ever-changing needs of businesses and consumers. Due to the fast-paced nature of retail, and the B2C/D2C e-comm business further fuelled by the recent acceleration of quick commerce for food and grocery deliveries in India, customer expectations are moving from day-definite to time-definite deliveries with more and more customers seeking same-day or even four-hour delivery options. This increases the responsibility of the express logistics providers as the market is seeking quality service providers that offer speedy delivery, 100% real-time tracking, customer support, and transparent prices.
To meet customer expectations, new-age logistics companies like Smartr Logistics are providing innovative solutions with optimum point-to-point overnight air connections for metros, tier-1, and tier-2 cities, allowing for next-day delivery at the last mile. By maintaining in-house last-mile delivery personnel, end-to-end real-time tracking, proactive updates, and 24×7 customer service, the start-up is disrupting the industry with a customer-centric approach that ensures a seamless experience.
For customer retention and conversion, all e-commerce players need to reduce delivery times and upgrade their offerings for same-day and/or next-day delivery. Faster deliveries lead to higher first attempt strike rates (FASR) and less return to origins (RTOs), thereby positively impacting customer decision-making, reducing the risk of cancellation, and significantly increasing conversation rates from regular delivery.
Recently, the government of India implemented several policy reforms and initiatives to highlight the opportunities and potential of this sector. The Open Network for Digital Commerce (ONDC) aims to further revolutionize the e-commerce sector with more options for shippers and consignees while ensuring fair competition with democratized access and transparent prices.
Founder, Managing Director and CEO,
Smartr Logistics
With the launch of the National Logistics Policy, the government has stressed its goal to reduce logistics costs to single digits as a percent of GDP. Logistics providers will be key facilitators in achieving these goals through technological solutions, innovative productivity enhancements, faster reach, and last-mile delivery efficiency.
Ultimately, consumers should have a choice between the urgency and economy of their requirements. Creating a niche, we are offering a variety of such products both within air and ground express services that are not only cutting-edge but also pocket-friendly. The express industry is ripe for high-quality service providers with a focus on customer satisfaction, thus driving significant positive changes in shaping the future of logistics in the country.
