In recent years, India has emerged as one of the fastest-growing digital commerce markets in the world. With the increasing penetration of the internet and smartphones, the country has witnessed a rapid shift in consumer behaviour towards online shopping. This trend has not only given rise to numerous e-commerce players but has also led to the growth of logistics companies and delivery services in the country. In this article, we will explore how consumer demand is driving digital commerce and logistics growth in India, along with examples, processes, and steps.
The rise of digital commerce in India
According to a report by the Indian Brand Equity Foundation, the e-commerce market in India is expected to reach USD 18.57 trillion by 2026, growing at a CAGR of 18.7% between 2021 and 2026. This growth is primarily driven by the increasing penetration of the internet and smartphones, along with a growing preference for online shopping among consumers.
The COVID-19 pandemic has further accelerated the growth of e-commerce in India, as people were forced to stay at home and rely on online shopping for their daily needs. This has led to a surge in demand for essential goods, electronics, and fashion products, among others.
Furthermore, the growth of digital commerce in India has also been fueled by the entry of global players such as Amazon and Walmart-owned Flipkart, along with the emergence of local players such as Reliance’s JioMart, Tata Group’s BigBasket, and many others. These players have not only expanded the market but have also brought in new technologies and innovations to improve the customer experience.
The role of logistics in digital commerce
As the e-commerce market in India continues to grow logistics and delivery services have become a critical component of the industry. The success of e-commerce players largely depends on their ability to deliver products quickly and efficiently to their customers. This has led to the emergence of numerous logistics and delivery companies in the country.
The logistics industry in India is expected to grow exponentially between 2021 and 2026 (Source-Mordor Intelligence). This growth is driven by the increasing demand for e-commerce, along with the adoption of new technologies such as automation, robotics, and drones.
The Process of logistics in digital commerce
The logistics process in digital commerce involves multiple steps, including order processing, picking and packing, transportation, and delivery. Let’s take a closer look at each of these steps:
- Order processing: This involves receiving the customer’s order and verifying it for accuracy and completeness.
- Picking and packing: Once the order is processed, the products are picked from the inventory and packed securely for transportation.
- Transportation: The products are transported from the warehouse or fulfilment centre to the delivery hub, using various modes of transportation such as road, rail, or air.
- Delivery: The products are delivered to the customer’s doorstep, using various delivery options such as express, standard, or same-day delivery.
The logistics process in digital commerce requires a high degree of coordination and efficiency to ensure the timely and accurate delivery of products to customers.
Examples of digital commerce and logistics growth in India
Let’s take a look at some examples of how consumer demand is driving digital commerce and logistics growth in India:
- Amazon India: It is one of the largest e-commerce players in the country, with a market share of over 30%. The company has invested heavily in building its logistics infrastructure, including fulfilment centres, delivery stations, and transportation networks. Further, it has also launched its own logistics service, i.e., Amazon Logistics, which handles the delivery of products for its sellers.
- Flipkart: It is another major player in the Indian e-commerce market, with a market share of over 28%. The company has a strong logistics and delivery network, with over 21 warehouses and more than 100 delivery hubs across the country. It has also launched its own logistics arm, Ekart, which offers end-to-end logistics services to its sellers.
- Swiggy: It is a food delivery platform that has grown rapidly in India in recent years. The company has built a robust logistics network, with a fleet of over 200,000 delivery executives across more than 500 cities in the country. Apart from this, it has also launched Swiggy Genie, a hyperlocal delivery service that delivers groceries, medicines, and other essentials to customers.
- Delhivery: It is a logistics and supply chain solutions provider that offers end-to-end logistics services to e-commerce players and other businesses. The company has a vast network of fulfilment centres, delivery hubs, and transportation networks across the country. It has raised over USD 1.2 billion in funding and is one of the fastest-growing logistics companies in India.
Key steps for driving digital commerce and logistics growth in India
To drive digital commerce and logistics growth in India, the following steps can be taken:
- Invest in logistics infrastructure: E-commerce players and logistics companies should invest in building their logistics infrastructure, including fulfilment centres, delivery stations, and transportation networks. This will enable faster and more efficient delivery of products to customers.
- Adopt new technologies: They should adopt new technologies such as automation, robotics, and drones to improve the efficiency and speed of their operations.
- Offer multiple delivery options: E-commerce players should offer multiple delivery options such as express, standard, and same-day delivery to cater to the diverse needs of customers.
- Focus on customer experience: They should focus on providing a seamless and hassle-free customer experience, including easy ordering, tracking, and returns.
- Expand to tier 2 and tier 3 cities: They should focus on expanding their operations to tier 2 and tier 3 cities in India, which have a largely untapped market for digital commerce.
To sum up
Consumer demand is driving digital commerce and logistics growth in India, with the e-commerce market growing exponentially. The growth of digital commerce in India has led to the emergence of numerous logistics and delivery companies, with the logistics industry expected to grow at a CAGR of 10.5% between 2021 and 2026. Further, to drive digital commerce and logistics growth in India, e-commerce players and logistics companies should invest in building their logistics infrastructure, adopt new technologies, offer multiple delivery options, focus on customer experience, and expand to Tier 2 and Tier 3 cities.
