Key Points: 

    • By 2027, the Indian D2C market is projected to grow to a GMV of US$ 30-35 Bn and up to 3 Bn shipments
    • One of the direct benefactors of the D2C market growth are third-party logistics providers (3PLs).
    • Amongst the 3PL players, Delhivery followed by Bluedart stand out as the preferred partner by brands looking for superior tech, quick and reliable delivery across a larger set of pin codes.
    • Players like Shadowfax and Xpressbees are used by brands where low-cost shipping is a primary criterion, with Shadowfax’s reach being more metro focused. Ecomm express is known for wider reach with a larger focus on tier 2+ cities.

 

October 06, Bangalore: In a recent report addressing the logistics requirements of Indian D2C brands, Redseer Strategy Consultants shared comprehensive insights into India’s D2C market, the logistics needs of the emerging new-age D2C brands in India and their preferences for third-party logistics partners therein.

The report highlighted that the journey of Indian D2C brands is nascent. With brand creation getting easier and incentivized, the Indian D2C market is projected to be a GMV of US$ 30-35 billion by 2027. This is a CAGR of around 40% for 2022-27, which is 3x+ that of the broader retail market and 1.6x+ that of the eCommerce market for the same period.

One of the direct benefactors of the D2C market growth are third-party logistics providers (3PLs). In 2022, the number of D2C shipments stood at approximately 0.5 Bn, and their projections indicate a substantial increase to 3 Bn D2C shipments by 2027. Highlighting the pivotal role of 3PLs, Mrigank Gutgutia, partner at Redseer commented, “3PL solutions tie-in well with D2C segment as demand varies across cities/regions and the required logistics investment is on the higher side. Brands need reliable logistics partners with a wider reach across India to ensure consistency of experience”.

To understand the key success factors for 3PL players serving D2C brands, Redseer Strategy Consultants has created a report with inputs from 60+ emerging new-age D2C brands in India. The report decodes the expectations that these D2C brands have from 3PL partners. The needs of these D2C brands varies significantly based on category and size. For instance:

  • In Fashion, return management is critical for most brands. However, smaller D2C brands care more about low-cost shipments and high shipment protection to save on losses due to damage.
  • In Beauty & Personal Care (BPC), due to the specific nature of the products, cold-storage supply chain is needed with the ability to handle fragile items. The mid-large BPC brands are also competing on reach and quick delivery, hence these aspects matter more prominently for them.
  • In Home & General Merchandise (Home & GM), reliable insurance with hassle-free claims is a major need, along with high degree of shipment protection to prevent damages.
  • In Packaged Foods & Beverages (PFB), because of lower margins, affordable shipping is critical. Also, with brands needing quick delivery in cities, dense networks to enabler quick delivery are also important.

On this, Mrigank summarises, “The keys to success for 3PLs vary widely depending on the category of D2C players, however, tech-enabled reliability, shipment protection and affordable pricing are what the D2C brands in India seek the most, with pan-India reach being a fairly common expectation”.

In this report, Redseer has also released a 3PL partner map breaking them into different cohorts based on D2C brands’ preferences.

The key inferences are as below.

  • The needs of D2C brands vary significantly and they choose 3PL partners to align with their specific context and needs.
  • The needs of the D2C brands are mapped across multiple considerations like shipment protection, cost, timeliness, geographical reach, and returns management.
  • Amongst the 3PL players, Delhivery followed by Bluedart stand out as the preferred partner by brands looking for superior tech, quick and reliable delivery across a larger set of pin codes.
  • Players like Shadowfax and Xpressbees are used by brands where low-cost shipping is a primary criterion, with Shadowfax’s reach being more metro focused. Ecomm express is known for wider reach with a larger focus on tier 2+ cities.