In a recently published report on the last mile delivery market, Fairfield Market Research provides a detailed growth analysis and forecast for the market in the next few years. The report looks at India’s last mile delivery landscape as a highly lucrative one and offers a thorough view of the various aspects of the same.
Aggressive eCommerce Expansion Underpins Demand Surge in India’s Last Mile Delivery
The exploding eCommerce industry has been taking Indian markets by storm over the recent past. The boost that it has given to both the third-party and captive logistics has been phenomenal. More than 1,000 million shipments recorded in 2022 are hastening to possibly surpass 5,000 million by the end of 2025.
The flourishing eCommerce received an overnight, massive push from the COVID-19 pandemic, and that is where the dynamics of logistics, and final mile delivery began to adopt some major paradigm shifts. It is 2023 and consumers are still showing preference for purchasing from home. With online buying becoming a prominent consumer behaviour, and spending on home delivery remaining strong, the demand for last mile deliveries will continue to see an upswing in the years to come.
Besides mounting eCommerce sales, the report has also attributed this scenario to the rapid multi-fold expansion in the number of warehouses across Indian industries over the recent past. With an approximately US$19 Bn revenue registered in 2022, the market will advance to surpass US$32 Bn in 2025 as suggested by the report.
Faster Delivery Will Display over 18% Growth in Demand Across India
In this study, the company has forecast over 17% growth for India’s last mile delivery landscape through 2025-end. Although regular delivery currently leads, the same day/fast delivery trend has been gaining stronger traction recently and will most likely outperform the former in the years to come. Through the end of 2025, the report expects demand for fast delivery to see more than 18% growth.
Moreover, the demand will remain higher in B2C sector when compared with that across the B2B, and C2C sectors in India. While food delivery holds the maximum opportunity for last mile delivery providers, delivery drones are expecting exceptionally flourishing prospects during the years of forecast. Like China, the Indian market also witnesses the primacy of FMCG, further followed by eCommerce, and retail.
Transition to Electric Vehicle Fleets for Delivery Will Take Time
Two-wheelers remain the delivery vehicles of choice as they also meet the primary requirements of faster and efficient delivery. The sustainability drive is however creating room for e-delivery vehicles that in addition to slashing the carbon footprint, bring down the operational costs.
While several delivery companies have been considering a shift toward electric vehicles, the initial capital investments are keeping the pace low. The leader in food delivery - Zomato has a set target for 2030, to have a 100% electric vehicle fleet for delivery. The FMCG spearhead, Big Basket also eyes up to 70% delivery vehicle electrification by 2024-end. However, smaller companies still find it an expensive affair to own a fleet of e-delivery vehicles. The complete transition will thus be slow, affirms the report.
Businesses Lean on Tech as they Realise the Challenges Ahead
The last mile delivery landscape will be amongst the vital contributors to India’s overall and economics growth in the near future. It thus becomes necessary for the brands to comprehend the industry trends better and align their logistics, delivery, and warehousing strategies with the same.
Given the fact that an average Indian spends more than 48 hours per year in traffic congestions, the pressure on drivers involved in final mile deliveries of goods cannot be understated. Companies are adopting multiple ways, and technological aids to empower their drivers to alleviate their pressure of reaching in time despite having to drive long distances. However, increasing turnaround times due to these persistent challenges tend to hamper the overall delivery experiences of consumers.
Besides, poor road infrastructure, underpaying jobs, and lack of necessary facilities represent the other important concerns troubling delivery companies in India. Businesses are thus developing interest in adoption of advanced technology aids for efficient and effective route planning. As businesses strive to stay ahead of the curve, they ought to embrace the latest trends in delivery space, including sustainability, and investments in intelligent or smart tracking, analytics, and AI technology.
Competition Analysis
Apart from EKart, and Delhivery, the prominent players that are steering India’s last mile delivery market include E-commerce Express, Safexpress, and Expressbees. Companies have been conducting research on the implementation of digitalisation and automation of their last mile logistics operations. Moreover, investments in omnichannel retailing will also help businesses improve in terms of costs, flexibility, and speed. Brands will then be able to craft a hyper-personalised retail experience for their consumers shopping online.