Independent logistics companies in India are having a blast. Online commerce companies are increasingly turning to third party logistics firms to share the load of multiplying orders. With the ecommerce scene in India only set to go north, things are looking perky for logistics as well.
Despite most companies like Flipkart, Amazon and others channelling 50% of their transport needs to their own logisticsdepartments, standalone courier companies are very much in demand.
The study shows that Indian ecommerce is expected to reach a cool $136 billion by 2020. Etailing alone is poised to grow to $37 billion by 2020.
The study attributes this spike in demand for logistics to, “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.”
Logistics to grow by 48%
A Nielson study shows that the logistics industry in India will have a cumulative average growth rate (CAGR) of 48% by 2020. It is expected to be worth $2.2 billion by 2020. In this lot, third party logistics firms will witness a 10 – 12 % of growth in the period.
Logistics companies like BlackBuck, TruckSuvidha and GoBolt are making a mark for themselves. GoBolt recently got a round of funding from MCube8 (MCube Captial’s wing exclusively for startups).
Existing players like Flipkart’s Ekart are trying to make money by extending their services to others. Ekart is considering a stint in hyper local delivery for other companies. The Indian Railways is also contemplating providing warehouse and transport facilities for ecommerce companies.
The competition is tough, but with ecommerce expected to grow, there will be no dearth of demand for transport companies.