D2C driving India’s e-commerce growth

India’s total shipments for e-commerce logistics grew to 4 billion in FY23, and direct-to-consumer (D2C) brands along with growth in Tier 2 plus cities. The industry saw intensifying competitive trends from smaller incumbents. 

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New Delhi, April 11: Tapping on the exponential growth of new segments such as Direct to Consumer (D2C), India’s e-commerce logistics space is expected to exceed 10 billion parcels by Financial Year 2028. According to a report by Redseer Strategy Consultants, total shipments, excluding hyperlocal shipments, for e-commerce logistics grew to 4 billion in FY23. The in-house logistics versus third-party players had a roughly equal share in this figure.

According to the report in the FY22-23, the industry saw intensifying competitive trends from smaller incumbents with yields also being challenged.

“However, despite this, the market is an attractive long-term bet with the overall e-commerce logistics opportunity to grow at a minimum CAGR of 20% to comfortably exceed 10 billion parcels by FY28 on the back of steady e-commerce growth,” it added.

Redseer, via its report, has observed that D2C brands across channels are expected to grow overall GMV (gross merchandise value) at 35% in the next few years. A total of $ 33 billion of GMV is expected to be generated from D2C brands across all channels by CY27. The company has said logistics players with relevant and customized offerings for D2C brands are well-positioned to capture market share in this high-growth segment. They are also expected to have a stronger yield profile going forward.

Logistics firm Delhivery remains the clear market leader in FY23 within e-commerce 3PLs (third-party logistics) parcels-as per Redseer data. The delivery firm is also more insulated from recent e-commerce pressures vs peers given their significant non-e-commerce clientele exposure