INDIA LAST MILE DELIVERY MARKET
INTRODUCTION
Last mile logistics is the most time consuming and expensive stage of the delivery process. Facing the competitiveness of E-commerce with the rapidly fluctuating consumer demand is one of the biggest challenges faced by most of the companies.
Further, Last mile delivery performance became the most crucial factor of the relationship between E-commerce retailer and end customer, as it can either establish or break the bond, which directly effects on the reordering decision of the customer. At present, customers have plenty of online buying options to switch up. Therefore, retailers exert pressure on Last mile service providers to optimize their performance.
Last mile (LM) is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination in the home [Wikipedia]. When it comes to rural areas, the cost per parcel is high. The key parties engaged in last mile logistics are retailers, LM service providers and customers. Sometimes, the retailer himself does the Last mile delivery while some retailers outsource that step to the 3PL party.
The “Last mile” is a logistic concept that involves adapted processes to ensure final delivery is comfortable for customers and efficient. Last mile delivery is the most expensive and time-consuming part of the shipping process. The “Last mile” delivery which accounts for 30% of total E-logistics cost has become one of the bottlenecks of E-commerce.
INDIA LAST MILE DELIVERY MARKET DYNAMICS
In the last couple of decades, India has witnessed a phenomenal shift in the delivery ecosystem. Owing to the growing demands of local supplies and a surprising boom in hyperlocal startups has given rise to a new delivery wing, the hyperlocal or last mile delivery ecosystem.
The India Last Mile Delivery Market is serviced by traditional logistics service providers (LSPs), e-commerce retail focused logistics service providers and captive logistics arms. In the past few years, dedicated LSPs for e-commerce retail have entered the market by using a technology-centric approach enabling the players to scale up, remain efficient and still provide competitive prices to customers.
Logistics in e-commerce retail plays a crucial role. There has been a significant number of investments, with global companies looking at India as a favourable market. Further, with shifts happening in e-commerce retail sector like larger share of demand expected from of tier II and tier III cities and air to surface movement, existing players are looking at innovative ideas to improve end-to-end logistics
Pack Station or Parcel Locker is a western concept now gaining ground in India. This mode of Last Mile delivery is more useful for B2C – as the shipment is meant for an individual customer who would be away on job during the daytime. Parcel Station is kept in a strategic location in a high dense population area, is easily accessible 24*7 and the consignee can come and take shipment on its own. Parcel Locker can be installed even a major Metro Stations or near Malls for ease of the customer
E-commerce companies and third-party logistics players across the board are committing to including electric vehicles in their fleet as a part of their sustainability initiatives. Back in January 2020, Amazon India made an announcement to include 10,000 EVs (both 3Ws and 4Ws) in its fleet of delivery vehicles by 2025.
INDIA LAST MILE DELIVERY MARKET SEGMENTATION
The India Last Mile Delivery Market can be segmented into following categories for further analysis.
By Application
- Residential Application
- Commercial Application
- Industrial Application
By Integration / Structure Type
- Private Partnership Only
- Public Private Partnership
- Program based Public Private Partnership
By Regional Classification
- Western Region – India
- Eastern Region – India
- Southern Region – India
- Northern Region – India
RECENT TRENDS IN INDIA LAST MILE DELIVERY MARKET
Last mile delivery can also be seen as the front-end, where the last mile meets the receiver. Last mile delivery and last mile transport are strongly interrelated and, therefore, are often researched in combination. The largest share focuses on emerging technologies and innovations, particularly goods reception solutions.
IoT facilitates availability of key parcel information such as parcel contents, parcel location in the supply chain and parcel arrival. It also facilitates faster flow of information in the supply chain, thus improving customer satisfaction levels.
It connects various technical devices (like vehicles, loading and unloading equipment, etc.) to one another through sensors installed on these devices, which enables procuring real-time information of various critical parameters such as temperature, filing rate, etc.
One of the key focus areas to become a Digital India is to develop a new age addressing system for the country. One of the key developments is digitization of addresses to align physical addresses with modern technology. As a result, India has witnessed growth of a number of companies which are focusing on digitization of addresses. This is expected to have a number of benefits which include, but are not limited to, reduction in transit time, lesser number of delivery attempts, lesser customer initiated returns and improved accuracy of last mile delivery.
COMPETITIVE LANDSCAPE
E-commerce and FMCG constitute nearly 70 percent of the last mile delivery market, which includes the movement of goods within 200 kilometers with a round trip of less than 24 hours, and a load of less than 5 tonnes. In the intra-city segment, the market is dominated by players such as Porter, LetsTransport, Blowhorn, and Lynk.
E-commerce biggies like Amazon, Flipkart, Reliance have tied with third-party players, SMEs, and neighbourhood stores, as well as hired thousands of delivery executives over the past year to efficiently executive last-mile deliveries. The companies have also strategized ways to boost their delivery capabilities through contactless offerings.
IKEA intends to be 100% electric globally in terms of mobility by 2030. Their Hyderabad store was first of its kind to introduce electric vehicles for delivery of small cargo to customer homes in India. Flipkart has committed to replacing 40% of its delivery fleet with EVs. Companies like Amazon, Big Basket, Grofers and Swiggy have been using Electric vehicles for home deliveries for over a year.
COMPANIES PROFILED
- Delhivery
- E Com Express
- Tigo
- Edgistify
- Ship Rocket
- Shadow fax
- QikPod
- Black Buck
- Rivigo
- E Kart Logistics
- Blue Dart
- TCI Express
