The Impact Of Rising E-Commerce Growth On Logistics Companies

The growth of the e-commerce industry renders a direct impact on logistics, warehouses and supply chain companies
The Impact Of Rising E-Commerce Growth On Logistics Companies
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Co-founder, GoBOLT
4 min read
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Logistics is considered to be the backbone of the Indian economy. Over the years, the e-commerce logistics landscape has been evolving significantly. IBEF's study highlights that Indian e-commerce will hit the $99 billion mark by 2024 and will boom at a CAGR of 27 per cent. As per Research and Markets’ reports, the Indian e-commerce logistics market was valued at $2.93 billion in 2019. It is anticipated to reach $11.48 billion by the end of 2027 and will grow at a CAGR of 18.8 per cent between 2020 and 2027.

The study further points out a trend and states that the Indian e-commerce market is flourishing primarily due to Internet penetration, the surge in usage of smartphones, and acceptance of online payments along with the emergence of new e-commerce players on social media and the government's support. Furthermore, the study states that the pandemic fueled the growth of the Indian e-commerce logistics segment. The e-commerce players are now looking out for alternate warehousing options to ensure the continuance of operations and reduce the occurrence of delivery-related glitches amid the growing e-commerce market and rising consumers' demands.

The present Indian logistics landscape

The growth of the e-commerce industry renders a direct impact on logistics, warehouses and supply chain companies. They will increasingly resort to outsourcing so as to manage the rising demands associated with e-commerce segment growth. Adopting this route either for last-mile delivery or for order fulfillment will enable them to ensure consistent, reliable, efficient and glitch-free delivery. Outsourcing will indeed emerge as a feasible solution for logistics firms to deal with the increasing pressure induced by the spike in the e-commerce industry.

The present Indian logistics sector handles both the inbound and outbound segments of manufacturing and service supply chains. E-commerce logistics are now leveraging various options including contactless deliveries that eliminate the risk of infection and boosts sales. Offering goods and services at competitive pricing further boosts the e-commerce sales and leads to the logistics market growing at a significant pace.

The impact of the pandemic on the Indian e-commerce logistics scenario

The pandemic’s outbreak contributed significantly in the noteworthy growth of the e-commerce sector. Additionally, it also brought about a shift in consumers’ behavior and preference and they are inclined towards online shopping while adhering to the social distancing norms. They now expect and demand quick delivery, competitive pricing as well as free shipping. This change in consumer psyche further led to the introduction of innovations in the traditional logistics and supply chain models. Consequently, companies are now pushing themselves to come up with new-age and tech-savvy strategies that offer low-cost and high-quality operations along with on-time delivery services as per the consumers' needs and preferences.

Adoption of technological innovations by logistics companies

The unprecedented growth of e-commerce has already nudged logistics companies to tread on the path of digital transformation. Adopting new-age tech solutions will empower them to run their operations seamlessly, quickly, and efficiently. This is critical especially for logistics firms who have been under tremendous pressure and working smoothly and effectively is the need of the hour in order to cope with the growing e-commerce market.

From the Internet-of-Things to artificial intelligence, machine learning, Big Data analytics, and automation, firms will be inclined to incorporate state-of-the-art technologies in their functioning so as to streamline and develop their supply chain models and manage the booming pressure. Digital transformation will play a pivotal role in improving the customer experience and in the bolstered growth of the logistics market as well. On the whole, tech disruption will indeed revolutionize the overall supply chain and logistics sector.

The road ahead for the e-commerce logistics segment

Owing to the demand of the market and to cater to the increasing requirements of the consumers, companies are now shifting and augmenting from long haul delivery to single warehouse locations. As and when the e-commerce market will continue to grow and proliferate, firms will also constantly keep on modifying their business models so as to accommodate with the fast, convenient, flexible and free shipping demand of the consumers. Apart from this, last-mile delivery will be another major focus area for companies that are looking to compete with other players in the e-commerce industry.

Summing up

In order to remain profitable and thrive in the market, the dire need of the hour for the logistics and transportation firms is to adopt solutions that offer flexibility, convenience and competitive pricing. Additionally, by embracing technological advancements, companies can successfully grow and meet the ever-evolving demands of the consumers as well. With the rising consumer expectations, digital transformation, and momentous growth of the e-commerce industry, it is projected that the Indian logistics sector will flourish in the times ahead and it seems to have a promising future.

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