E-commerce Boom and Logistics Disruption
Reasons Behind the E-commerce Boom & Logistics Disruption
In a post pandemic era, you are making a significant number of your purchases
online. Be it a smartphone or a delicious pack of briyani, and everything is moving
online. To its credit, the e-commerce industry has also transformed the consumption
landscape and the logistics industry. In this blog, we will understand the reasons
behind the growth of e-commerce in India and see how it has impacted logistics.
Reasons behind " The E-com Boom"
Front-end-A Tech Savvy End User:
Broad Smartphone penetration, internet access, and massive investments by e-
commerce players in brand awareness have gone a long way toward exponentially
increasing the number of consumers preferring e-commerce over in-store
purchases.
Back-end: A Supportive Infrastructure:
Apart from the change in end customer preference, other reasons like infrastructural
development, including the boom in warehousing, a strong logistics network with
technological capabilities to integrate across platforms, and a massive improvement
in the last mile delivery network, have also enabled the transformation to e-
commerce. According to a study, the Indian online consumption market is expected
to grow by 21.5% and hit the $75 billion mark in terms of transaction value in 2022.
The Current Landscape of Logistics in India is:
The logistics service providers cover both inbound and outbound logistics for online
retailers. Contactless deliveries are a buzzword in logistics to reduce infection risks.
Furthermore, cost competition in the e-commerce sector is also making the logistics
industry cost competitive. It, combined with the massive push through NLP, will be a
boon for the Indian logistics sector.
The Impact on the Logistics Sector
Enhancements in Storage and Warehousing:
The growth in e-commerce has been something that has been expected for a long
time now, the pandemic has indeed accelerated it. The exponential growth
significantly impacts logistics, warehousing, and supply chain management services.
While delivery claims are becoming increasingly short, e-commerce companies are
entering contracts with multiple logistics service providers to ensure a smooth
delivery experience. The next time you drive down the highway and count the
number of warehouses on the outskirts of your city, you will be surprised by the
massive growth.
The Techno Disruption:
A variety of fulfillment services are coming to the sellers' aid. There has also been
significant integration of purchase, delivery, and payments through various
standalone e-commerce services through APIs, making the process of e-commerce
ordering a breeze. Yes, the delivery times have been reduced to minutes and hours
rather than days! These are now possible thanks to data analytics. It has led to a cost
reduction of around 20%.
Low-Cost Labor:
India has a vast number of young people. Unemployment has been rampant in
recent times. The logistics industry can absorb a significant amount of labour. All it
takes is a vehicle and a valid license; you become employable. The vast supply of
delivery labour has resulted in lower delivery costs and deeper penetration, making
it possible to move stuff across any geography.
The Way Forward:
To summarize, as mobile and internet penetration increase, e-commerce will
dominate the consumption landscape further. Better connectivity ensured by the
NLP, better storage and handling, better technology, and a stronger and broader
delivery network will make the logistics industry thrive in the coming years. If you
are a seller, it is time to trust our logistics network to offer a great delivery
experience!! It is time to go online.