The booming logistics industry in India

Delhi-based Shadowfax, an on-demand delivery service, announced that it has acquired smaller player Pickingo, reports Tech in Asia

Booming ecommerce seems to have put India’s logistics business in consolidation mode. Today, Delhi-based Shadowfax, an on-demand delivery service, announced that it has acquired smaller player Pickingo for an undisclosed amount.

With the new acquisition, it has taken on about 45 employees from Pickingo’s management and a few hundred delivery boys in a cash and stock deal, according to a statement to the press.
 

Food tech behemoth Zomato had been eyeing Pickingo, but eventually backed out, according to the Economic Times.

India’s logistics industry is estimated to be worth $130 billion and may touch $300 billion by 2020. It has seen a great deal of activity, especially as ecommerce picks up pace, but is still highly fragmented. According to Indian consulting firm Technopak, India’s ecommerce start-ups spend as much as 30% of their net income on logistics.
 

Flipkart and Snapdeal, two of India’s largest ecommerce companies, spend so much money on logistics that they don’t expect to be profitable for the next few years. India spends around 14.4% of its GDP on logistics and transportation as compared to less than eight percent spent by the other developing countries.
 

And that’s where consolidation can help, especially in a country as vast and as populous as India. “Consolidation helps cut costs by improving efficiencies. Weaker players and competitors are eliminated and good ones are able to further their efficiencies,” a financial consultant told Tech In Asia.

This is an excerpt from Tech in Asia. You can read the full article here.