With over 6.4 billion shipments handled in FY24 across retail, food, and grocery sectors, India’s Third-Party Logistics (3PL) market is navigating unprecedented demand. The rise in e-commerce, quick commerce, and food delivery has not only accelerated the need for efficient logistics but has also opened vast growth potential for specialized delivery needs.   

The Rise of Indian E-commerce: A Surge in Shipments 

The booming Indian e-commerce market has been fuelled by increasing internet access, smartphone adoption and a growing middle class. B2C e-commerce shipments exceeded 4.4 billion in FY24, with categories like fashion and beauty becoming major contributors. These products, often low in their order value, have led to a rise in reverse logistics, adding complexity to supply chains. Additionally, quick commerce and food delivery platforms have emerged as key players, catering to urban consumers’ demand for speed and convenience. 

3PL: The Backbone of E-commerce Expansion 

As the logistics needs of these e-commerce platforms evolve, leading players are turning to 3PL providers to handle increasing logistical complexities. They are emerging as specialists in handling high-value goods, bulky shipments, and reverse logistics, areas that require advanced infrastructure and technology. Further, 62% of all e-commerce shipments now come from Tier 2+ cities, where delivery networks must cover a vast range of pin codes and this number is expected to rise to 70-80% by FY29. 

Quick Commerce and Food Delivery: A Nascent but High-Growth Segment 

Quick commerce and food delivery are rapidly growing sectors, though 3PL adoption in these spaces is still at an early stage. As urban consumers increasingly demand ultra-fast deliveries, quick commerce platforms have relied on their own logistics networks. However, as these platforms scale and expand into new regions, the need for 3PL support is becoming more apparent​.  

Quick commerce also saw 180% growth in shipments to 0.6 billion in FY24 and has now expanded into non-grocery categories, creating new opportunities for 3PL providers​. Further, India’s food delivery market too is expected to grow at a CAGR of 17-22% over the next five years, with more platforms planning to outsource logistics to 3PL providers. The surge in demand for online food ordering, fuelled by urbanization and the rise of hyperlocal delivery services, has also spurred partnerships with restaurants. As of FY 24, the online food delivery market stood at ~INR 579 billion (~USD 7 billion) translating to ~1.4 billion shipments. 

A new logistics ecosystem is emerging around dark stores and mother hubs, providing warehousing and inventory management solutions for quick commerce platforms. This market is expected to grow at a CAGR of 47%, unlocking further new opportunities for 3PLs​. 

Winning in the B2C E-commerce Market 

As the 3PL market becomes more commoditized, cost leadership and operational efficiency are crucial for capturing high-volume contracts. Automation, route optimization, and economies of scale will help 3PL providers reduce per-unit costs while remaining competitive. However, true profitability lies in offering high-value services like same-day delivery, heavy shipment management, and specialized reverse logistics.  

At Redseer Strategy Consultants can help your business strike the optimal balance between cost leadership and value-added services. Through strategic planning, operational audits, and competitive benchmarking, we offer actionable strategies to help 3PL providers increase their profit margins and expand service offerings. 

Unlocking Future Growth Opportunities for India’s 3PL Market 

India’s 3PL sector is at a pivotal juncture, with the rapid expansion of e-commerce, quick commerce, and food delivery setting the stage for substantial growth. To stay competitive in this fast-evolving market, expanding into underserved regions and enhancing capabilities to handle complex shipments is essential. Redseer’s expertise in market entry strategy due diligence and network optimization would enable 3PL providers and e-commerce players to capture new opportunities in these growth-intensive regions.  

To understand the full scope of these opportunities and how your business can thrive in this evolving market, download our comprehensive report. Discover how Redseer’s consulting expertise, deep research insights, and strategic planning services can drive your growth in this thriving sector. Download the full report today and see how we can help propel your business forward in India’s thriving 3PL industry.