1. With the rapid growth of E-commerce in India, it is estimated to handle 10B shipments by 2025

India eCommerce logistics market, 2017-2025F, million shipments

eCommerce Shipment split, By sectors, FY20

Total eCommerce shipment = 2.5 billion

In this comprehensive study, e-commerce has been categorized into six different segments including hyperlocal, vertical, eB2B, direct-to-consumer (D2C) & and omni-channel. Horizontal and hyperlocal accounted for 85% of the shipments. With the increasing growth of e-commerce, shipments are estimated to grow from 2.5 billion in FY2020 to over 10 billion by FY 25.

2. To dive into the maturity of each vertical of E-commerce, we evaluated them on 4 key pillars

RedSeer Shadowfax Logistics Index Framework

In the study, each of the segment was ranked over four indices including growth and scale, speed and cost efficiency, customer experience and merchant experience. The study looks into all the players across each segment and finds out who performed the best in which index.

3. Horizontal ecommerce came in the lead here followed by Vertical E-commerce

RedSeer Shadowfax Logistics Index (RSLI) Score, Q2-FY21, Scale: 0 to 100

Note (s):

     1. Merchant Index not applicable for Omnichannel & D2C eRTM retailers

     2. Customer surveys=4300+; Merchant surveys: 1200+, Expert discussions: 30+

Key Takeaways:

  • Growth and scale – Horizontals leading on growth this quarter driven by a strong festive season
  • Speed and Cost efficiency- Hyperlocal brands and vertical platforms have high costs of fulfillment
  • Customer Experience- eB2B needs deeper solutioning to create customer delight
  • Merchant Experience- Merchant satisfaction falls below expectations for Hyperlocal

There exists a significant gap between horizontal and other e-commerce sectors and logistics has a huge role to play here. Horizontal platforms led in growth and scale Index, primarily due to hyper growth owing to the pent up demand and high shipment volume, as compared to other sectors.

The future growth of these sectors will be fueled by increased reach in Tier 2+ cities. Other segments of e-commerce can perform at par with horizontals by improvising on some of these areas:

      1. Smart warehousing strategies, tech based approach to cut shipment delays. 

      2. Strong technology stacks and robust crowdsourced models can help brands to reduce fulfillment costs and achieve customer delight. 

      3. New age logistics players with real-time POD, multi SKU delivery and partial returns can enable seamless transactions along with speedier forward and reverse movements which will be critical to manage seller working capital.

With the players starting to focus on these key areas, there will be a clear growth in all the key parameters making a significant difference in their journey to success. We will be tracking how each segment progresses on these indices and bring this report to you every quarter.