1.
INDIAN
E-COMMERCE
LOGISTICS
INDUSTRY

2.
Table of Contents
S/N TOPIC
(A) Indian Logistics and E-Commerce: Overview & Growth Factors
(B) Recent Trends and Developments
(C) Industry Challenges
(D) Key Players
(E) Impact of Covid-19 on the industry

3.
INDIAN LOGISTICS:
OVERVIEW

4.
160
215
500
2018 2020 (E) 2025 (E)
Overall Logistics Market Size (USD billion)
16%
18%
Indian Logistics Industry: Overview
Logistics industry is a crucial sector with a significant contribution to GDP and employment in India.
68
86
2019 2024 (E)
Source: Niti Aayog Economic Survey 2017-18
14
%
10%
For India:
Share of Logistics Cost as a % of GDP
2018 2022
Target
India’s Warehousing Space Requirement
(Million Square Meter)
7%
For developed
countries - Share
of Logistics Cost
as a % of GDP

5.
The automotive sector (components and finished vehicles) is the largest sector, however E-Commerce is fast becoming one of
the main market segments for the logistics industry.
Automotive
Components, 26%
Cars and UVs, 17%
E-Commerce, 16%
Two & Three
Wheelers, 13%
Organized
Retail, 8%
Consumer Durables &
FMCG, 5%
Logistics Market Share by Industry (2018)
16%
28%
2018 2025
Indian Logistics Industry: Overview
Growth in Share of E-Commerce Logistics Among Total
Logistics

6.
Indian Logistics Industry: Overview
Surface/ Road transport is the most common mode of transportation in logistics sector.
60%
31%
9%
Road Rail Coastal
Mode of Transportation (2018)
Source: Ministry of Commerce
29%
15%
21%
16%
19%
36%
24%
21%
11%
8%
0%
10%
20%
30%
40%
3PL E-Commerce Manufacturing Retail Others
Warehousing Market Share by Industry (2017-18)
2017 2018
Cost of Transportation
INR 3.00/ton
INR 1.5/ton
INR 1.00/ton
Warehousing Market Share by Industry (2017-
18)

7.
Indian Logistics Industry: Overview
Express logistics, which primarily caters to E-commerce logistics shipments, is expected to grow at a CAGR of 15-16% in the
next five years.
< 2 KGs, 50%
2-5 Kgs, 30%
> 5 Kgs, 20%
Consignment Distribution by Weight (2018)
2.8
9
0
5
10
2018 2025E
Express Logistics Market Size (USD Billion)
15-16%
Express delivery is the fastest form of
shipping - the shipment will get
transported to the customer
anywhere between 24 to 72 hours.

8.
ECOMMERCE
INDUSTRY: OVERVIEW

9.
E-Commerce Industry: Overview and Growth Factors
Indian E-commerce Industry is dominated of two players who control 63% of the total market.
14
50
64
2014 2018 2020E
Market Size (USD billion)
Flipkart
32%
Amazon
31%
PayTm Mall
6%
Myntra
5%
Snapdeal
2%
Others
24%
Market Share (2018)
Source: Economic times IndiaSource: Statista, ‘19
37%
13%

10.
E-Commerce Industry: Overview and Growth Factors
Indian E-commerce Growth is driven by increasing access to smartphones and internet penetration.
0.3
1.2
8.3
9.9
15.1
India Indonesia Japan China South Korea
Cost Per GB of Data in 2019 (USD)
295
437 483 525
252 299 340 374
2016 2017 2018 2019
Number of Internet and Smartphone Users (Million
Internet Users Smartphone Users Source: Statista, ‘19 Source: Statista, ‘19
Smartphone penetration in India
26%
(2018)
(2022E)
36%
Internet Pricing Trend in India
93% Reduction
INR 269/GB
(USD 3.78/GB)
(2014)
INR 18.54/GB
(USD 0.26/GB)
(2019)
21%
14%

11.
ECOMMERCE
LOGISTICS: OVERVIEW
& GROWTH DRIVERS

12.
E-Commerce Logistics: Overview and Growth Factors
Metro Cities,
50%
Tier I, 12%
Tier II and
Below, 38%
Market Share of E-Commerce Logistics:
By City-type*
(2018)
As of 2018, Metro and Tier 1 cities account for more than half of the business in E-Commerce logistics industry by number of
shipments.
Source: IBEF
2%
3%
8%
9%
29%
48%
0% 20% 40% 60%
Others
Books
Personal Care & Baby Products
Home Furnishing
Apparel
Electronics
E-commerce Sales Share:
By Value of Product Categories
(2018)
*Metro City: More than 1 Million Population, Tier I City: More than 100,000 Population, Tier II and Below: Population less than 100000
(1 Million
Shipments / day)

13.
E-Commerce Logistics: Overview and Growth Factors
As of 2018, Metro and Tier 1 cities account for more than half of the business in E-Commerce logistics industry by number of
shipments.
2%
3%
8%
9%
29%
48%
0% 20% 40% 60%
Others
Books
Personal Care & Baby Products
Home Furnishing
Apparel
Electronics
E-commerce Sales Share:
By Value of Product Categories
(2018)
*Metro City: More than 1 Million Population, Tier I City: More than 100,000 Population, Tier II and Below: Population less than 100000
Metro Cities,
50%
Tier I, 12%
Tier II and
Below, 38%
Market Share of E-Commerce Logistics:
By City-type*
(2018)
Source: IBEF
(1 Million
Shipments / day)

14.
E Commerce Logistics: Value Chain of Delivery
E-Commerce players are facing the biggest cost challenge from last mile delivery of the product which accounts for approximately 50% of total
logistics cost.
8%
2%
43%
47%
Cost Break-up by Logistics Activities (2018)
First Mile Processing Line Haul Last Mile

15.
RECENT TRENDS &
DEVELOPMENT

16.
Recent Trends and Developments
Reduced Transit Time
Reduction in paperwork, draft e-way bill only
Consolidation of warehouses
Source: IBEF
Implementation of GST Tax in India since July 2017 had a positive effect on E-Commerce logistics Industry as it eased the
movement of goods between state borders.
“E-Way Bill is an Electronic Way bill for movement of goods to be
generated on the E-Way Bill Portal. A GST registered person,
transporting goods worth INR50000 (USD674) and above, in a
vehicle has to generate an e-way bill on ewaybillgst.gov.in.”
In 2018, Indian government amended E-Commerce regulations: FDI in subsidiaries of E-Commerce companies was capped at
25% in inventory based model and allowed 100% for market place model.
Increased demand for office, warehousing, logistic spaces
Volume of deliveries expected to expand.
100% FDI is allowed in warehousing sector will reduce the overall
logistics cost due to better supply chain management.
Granting of status of “Infrastructure” to logistics sector, in 2017.

17.
Solving Last Mile Delivery challenge
Partner Department Store
Order placed at the store
using mobile of shop
partner
Information reaches at
warehouse
Order Dispatched to
Store Partner
Order Collected by
customer from shop
Delivery Model in Partnership with Mom and Pop Stores
Number of Stores
(2019)
Number of CitiesKey E-Commerce
Companies
20000
27000
9000
700
700
50
Delivery Network of major E-Commerce Companies
Captive arms of E-Commerce companies have come with some new delivery models such as partnering with small mom and
pop shops across Tier II and below cities for ordering and delivery of products.

18.
INDUSTRY
CHALLENGES

19.
Industry Challenges
30%
70%
Returned Accepted
23%
22%
20%
35%
Wrong Item
Received
Product Not
Matching
Damaged
Product
Others*
Product returns is the biggest challenge faced by logistics industry as its cost exceeds the delivery cost.
Dispatch Final Delivery
Product ReturnTo Warehouse
Cost of
Logistics
(2019)
Apprx INR145
(USD2.00)
Return Rate of Shipments
(2018)
Key Reasons For Return
(2018)
INR65
(USD 0.88)
Average Cost of Shipment
to end customer:
INR75
(USD 1.01)
Cost of return shipment

20.
Industry Challenges
Cash on Delivery (CoD) is the most preferred mode of payment by online shoppers in India.
Cash on
Delivery
Orders
Prepaid
Orders
Mode of Payment (2019)
Metro &
Tier 1
38%
Tier II &
Below
62%
Share of CoD (2018)
Source: Spire Estimates (2019)
Source: Spire Estimates (2018)
60-75%
25-40%
Logistics companies have to develop capabilities to collect cash
from the delivery point and manage the transactions. This has
additional cost implications on them.
According to Amazon and Flipkart prepaid orders have lower
proportion / probability of return in comparison to cash on delivery
orders
Challenges with CoD:
Value limitation on purchases
using CoD.
Steps taken by companies to improve the situation:
20,000
50,000 50,000
INR
INR INR
(USD270)
(USD674)(USD674)
Training of last mile delivery staff to process payments using cards at the delivery sites
or collection centers.

21.
ECOMMERCE
LOGISTICS: KEY
PLAYERS

22.
Overview of E-Commerce Logistics Players
E-Commerce players have developed captive logistics arms for managing delivery of their shipments. These captive arms have
the highest market share in E-Commerce logistics industry.
Captive
Logistics
Arms, 49%
E-Commerce
Focussed
Players, 28%
Traditional
Players, 23%
Type of Logistics Provider (2018)
620.2
237.7
141.1
292.0
Ekart Delhivery Ecom Express Amazon
Revenue in USD Million (2019)
Source: Ministry of Commerce
Top four companies in terms of shipments managed and revenue are:
E-Commerce Logistics Shipments (2018)
57 million
shipments
/month
Most of these Shipments (~49%) are
managed by the captive arms of E-
Commerce Players.

23.
IMPACT OF COVID-19
ON E-COMMERCE
LOGISTICS IN INDIA

24.
Impact Of Covid-19 On E-Commerce Logistics In India
The outbreak of the pandemic has proven to be a boon for the E-Commerce industry in India where logistics is primarily
focused on retail consumers.
Consumers are
avoiding crowded
marketplaces and
are leaving their
houses a lot less.
Big Indian
MNCs
investing in
small E-Com
platforms
Logistic platforms are opting more stringent
guidelines for slotted and same day
deliveries to fulfill the increased demand of
essential material.
Daily delivery orders have
doubled for essential
items focused E-Com
platforms.
Logistics focusing
on making
touchless
deliveries.
Hyperlocal delivery - ensure deliveries in
2,3 or 4 hours to customer’s doorsteps, at a
cost that is viable to the retailer.

25.
SPIRE INDIA SOLUTIONS

26.
SPIRE INDIA SOLUTIONS
Business
Ecosystem
Channels
Competitors
Country
Environment
Customers
Government
Opinion
Leaders
Substitutes
Suppliers

27.
THANK YOU!