A lot has changed in the growth story in e-commerce over the years. Initially, e-commerce players preferred to have their own in-house logistics to streamline the delivery process and make it as quick as possible. But, this changed as more niche players emerged in the market who started relying on third-party logistics (3PL) to fulfill their deliveries. Today, brands, traditional retailers and even horizontal marketplaces have started depending on 3PL to fulfill the growing demands across the country.

Here we have captured how the growth of e-commerce will inevitably lead to the growth of 3PL and the key role that it will play in the coming years.

1. Ecommerce has been growing steadily and is expected to grow 4X by 2024

India eCommerce shipment split – by type, In Bn, by % – CY 2018-2024

Growth driver-

1. Demand side drivers:

a) Increased adoption of online platforms in COVID and expansion in Tier 1,2+ cities

b) Growth of new segments

2. Supply-side drivers:

a) Shift of local stores online

b) Efficient last mile delivery infrastructure

E-commerce is expected to become about 12 billion shipments in 2024 which is 4-times its current size. The growth will be majorly driven by the hyperlocal segment.

2. And these shipments being handled by a mix of captive and third party players

3PL logistics offering – by eCommerce segments Descriptive

The shipment volume today is managed by captive as well as 3PL. With more emerging direct-consumer brands and traditional brands going online, inevitably, 3PL will play a key role going forward. 3PL brings value added services like increased reach, speed and flexibility, manage high demand, optimized cost and expertise in technology of supply chain which makes the process hassle-free.

Players like Rapido and Dunzo also cater in certain segments even though they are not logistics players.e e-commerce industry will grow upto $140 billion by CY2025 and major social commerce players will contribute at least upto 5% by then.

3. 3PLs currently handle 27% of these shipments, and are expected to grow 3 times in the next 4 years

India eCommerce shipment split – by type, In Bn, by % – CY 2018-2024

3PL share grew to 27% in 2020 from 22%, due to sudden spike in demand after Covid especially for e-grocery and e-tailing which could not be handled only by captives. This sudden growth is expected to stabilise at 25% in the next 4 years.

4. With the hyperlocal growing much faster, 3PL volume in hyperlocal to become 10 times of its current size

Note (s): Base case scenario for hyperlocal 3PL has been considered in growth forecast

3PL will play a major role in the hyperlocal segment as 3PL volume is expected to grow 10-times by 2024. Further, the players will likely outsource its logistics as more players also start catering to the market needs. The 3PL is expected to fulfill 3 billion shipments from the current 0.85 billion shipments.


  • Mukesh is a go-getter with an analytical approach who enjoys solving challenging business issues. He has worked extensively in the retail, TMT, public policy, and private equity sectors and specialises in research and growth initiatives.