Market Trends of India E-commerce Logistics Industry
Growth in e-Commerce Sales is Driving the Growth of the Market
The Indian e-commerce industry is growing predominantly and is expected to surpass the US to become the second-largest e-commerce market in the world by 2034, as per the India Brand Equity Foundation. India's e-commerce sector is expected to reach US 197 billion by 2027 from US 66.76 billion in 2021, witnessing an 18.4% CAGR.
The e-commerce business helps the sellers sell on a global scale and market the business using marketing tools that help create, execute, and analyze campaigns on Facebook and Google. The sellers can use a single dashboard to manage orders, shipping, and payments, which is highly flexible. The improvement of consumer experiences in eCommerce stores is evident through the same-day delivery process and flexible options. Due to these efficiencies, there is continuous growth in e-commerce sales across the existing and upcoming years.
The number of players entering the e-commerce sector is gradually increasing due to the expectation of increased penetration on the internet and smartphone users. Online retailers are partnering with third-party logistics (3PL) providers to manage issues related to delivery, such as inventory, packaging, shipping, warehousing, and tracking. This is directly contributing to the revenue of the logistics sector.
Increase in Number of Internet Users in India
Statista expects the number of internet users to reach 1,232.33 million by 2027. It is estimated to increase in both urban as well as in rural regions, indicating dynamic growth in access to the Internet. India is the second largest online market in the world, ranking only behind China, according to a report by the Internet and Mobile Association of India (IAMAI). Due to the increase in mobile connectivity, growth in the purchasing behavior of women, and penetration in rural areas, the number of users has increased gradually.
The Digital India program has driven the number of internet connections in 2021 to 830 million, as per the data from the India Brand Equity Foundation. Out of the total internet connections, 55% were in urban areas, of which 97% were wireless. India’s overall smartphone market grew by 7% in 2021. The number of smartphone users in India is expected to reach 887.4 million by 2030, which clearly shows the increase in the number of users. India has the highest data consumption rate worldwide, at 14.1 GB of data per person a month.
