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May, 2021     

India’s last mile is expected to become a $6Bn profitable market by 2024

India’s last mile delivery market is moving in a similar direction to markets like China and USA where the penetration has reached more than 10%. Following this growth trajectory, India is set to touch a market size of $6-7 billion by 2024.


Logistics have remained a backbone for many industries and over the years have enhanced its technology-based offerings to suit various sectors and their needs. While capturing the logistics market in entirety is difficult, we are taking a look at the road logistics market which contributes the largest and its last-mile delivery which is moving in the right direction to profitability.

1. Road logistics contributes to ~8% of India’s GDP

The overall road logistics constitutes ~8% of the overall GDP of India across the value creation cycle The road logistics contributes the highest in the overall logistics market.

2. Which is a total of $240Bn, of which 18% is Intracity Logistics

Breakdown of Indian Logistics by Type 2019, USD Bn

Note – 1. Logistics cost does not include inventory costs

Road logistics is a market size of $240 billion with 75% share of the overall market size. It is divided between Intracity and intercity logistics.

Intracity logistics, which includes the last mile delivery, is the movement of goods within 200 km (one side), with a round trip less than 24 hours, and a load <5T. It currently represents ~18% of the overall logistics. In the intra-city segment, the market is dominated by players like Porter, LetsTransport, Blowhorn and Lynk.

3. Last mile logistics is a big part of Intracity, which in ~50% of the cases is moving FMCG

India’s last mile delivery constitutes of FMCG, ecommerce, retail and other categories. Of these, FMCG constitutes the highest followed by ecommerce. In the ecommerce sector, logistics is divided between captive and third-party logistics (3PL). The overall e-commerce shipments has grown from 817 million shipments in 2018 to 1364 shipments last year, and is expected to grow over 5000 by 2025.

4. And is expected to become a $6 Bn profitable market by 2024

Note – COVID impact not factored in

India’s last mile delivery market is moving in a similar direction to markets like China and USA where the penetration has reached more than 10%. Following this growth trajectory, India is set to touch a market size of $6-7 billion by 2024.