With the tech-savvy Gen-Next and the upwardly mobile shopping online to buy even their daily needs in cities and towns across India, third-party logistics firms are riding high on the e-commerce boom.
Though leading e-tail behemoths like Flipkart, Amazon and Snapdeal have in-house logistics networks and warehouses for quick turn-around of merchandise and their speedy delivery, hundreds of buyers and sellers across verticals depend on third-party logistics companies like GoBolt, Rivigo, BlackBuck and TruckSuvidha for the supply chain in the B2B and B2C segments.
According to a recent study by the global consultancy services firm KPMG, the rapid growth of smartphones, internet penetration, increase in urban households, ease of payment, access and the variety that online shopping offers are fuelling the e-commerce sector across the country.
"The rapid e-commerce growth in retail and other segments has resulted in the emergence of third-party logistics operators, emphasis on service levels, increased penetration in Tier II and Tier III cities, surged cash-on-delivery services, geographic penetration and supply chain security requirements," said the study.
At a cumulative average growth rate (CAGR) of 40 per cent, the overall e-commerce market in India is projected to touch $136 billion by 2020 from $18 billion in 2014, with online travel segment alone accounting for about 70 per cent followed by e-tailing, financial services, classified, job searches and matrimony.
As one of the fastest-growing markets, e-tailing is expected to grow at 52 per cent CAGR to reach $37 billion by 2020 from $3 billion in 2014.
Of all segments, e-tailing drives the investment and value of the logistics sector, which has spawned a new class of third-party operators. Logistic needs of the e-commerce players are evolving in line with the changing business requirements.
"As a key growth enabler of the e-tail segment, the operators are emerging as a differentiator in terms of customer service. E-commerce firms and logistics providers have to collaborate to drive the industry forward," the study advocated.
Virtual access to goods and services from anywhere is making netizens and smartphone users even in Tier II and Tier III cities place orders for delivery by third-party logistics providers.
"The increasing numbers of cash-on-delivery orders make the operators devise different cash-handling methods. As more offline retailers move to online channels, the operators have to expand their capacity to handle the growing volumes," an industry expert told IANS here.
Focus on surface movement will increase demand for a multi-mode mix and new categories will require accurate weight reconciliation systems, which also create new opportunities.
The US-based global information and data firm Nielson said the overall logistics sector in India would witness 48 per cent CAGR to reach $2.2 billion by 2020 from 0.2 billion in 2014
In the derivative sector, the third-party logistics provider and cold chain will be a party of the logistics and warehousing industry, with 10-12 per cent CAGR over the next four years.
"Popularity of cash-on-delivery has compelled the logistics industry to change from traditional mode to tech-based support for the e-commerce firms to ensure speedy delivery of goods, as evident from many of them diversifying their services to make space for e-commerce logistics," Nielson said.
Although in-house logistics firms command 50 per cent of the e-commerce market, third-party logistics, including traditional providers, have partnered with e-tailers to meet their business requirements.
"With the focus shifting to specialised deliveries from standard, third-party logistics have to invest in capacity-building and related infrastructure," Nielson pointed out.
Emerging opportunities in the tech-driven logistics industry inspired New Delhi-based Camions Logistics Solutions Ltd to incubate tech-logistics start-up GoBolt in 2015 to provide transport solutions in the B2B segment.
"With in-line haul and short-haul trucking, we provide express and non-express road transportation solutions, route/delivery planning, real-time tracking, reduced transit time and reliable documentation," GoBolt co-founder Sumit Sharma told IANS.
Set up in September 2015, the year-old firm has recently raised an undisclosed amount of pre-series funding from start-up incubator MCube8 of the financial advisory firm MCube Captial.
"Using e-market place, big data, analytics, fleet management and multi-channel customer interaction systems, we optimise operations and route planning by adopting benchmark practices like double-driver model and hub-relay model," said the other co-founder, Parag Aggarwal.
With a fleet of 600 trucks, the start-up caters to e-commerce, pharma, automobile, food processing firms and fast-moving consumer and white goods in 35 cities across the country.
Similarly, start-ups like Rivigo, BlackBuck and TruckSuvidha offer third-party, inter-city and inter-state surface transport logistics to retailers and e-tailers in diverse sectors across the country.
(Fakir Balaji can be contacted at firstname.lastname@example.org)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)