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    Delhivery - About The Industry

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    Yash Purohit
    The logistics industry in India faces challenges due to the country's large population and many unplanned cities. Traditional postal services were inefficient. The market is now valued at $410 billion, though only 3.5% is organized. Organized players are expected to grow rapidly by offering integrated services and technology. They can reduce indirect costs like damage and waste that currently account for $166 billion annually. Major existing players focus on business-to-business or large packages, while e-commerce companies developed their own logistics for smaller deliveries. However, a gap remained for business-to-consumer and door-to-door delivery, which Delhivery was created to address.

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    Delhivery - About The Industry

    Uploaded by

    Yash Purohit
    18 views1 page
    The logistics industry in India faces challenges due to the country's large population and many unplanned cities. Traditional postal services were inefficient. The market is now valued at $410 billion, though only 3.5% is organized. Organized players are expected to grow rapidly by offering integrated services and technology. They can reduce indirect costs like damage and waste that currently account for $166 billion annually. Major existing players focus on business-to-business or large packages, while e-commerce companies developed their own logistics for smaller deliveries. However, a gap remained for business-to-consumer and door-to-door delivery, which Delhivery was created to address.

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    The logistics industry in India faces challenges due to the country's large population and many unplanned cities. Traditional postal services were inefficient. The market is now valued at $410 billion, though only 3.5% is organized. Organized players are expected to grow rapidly by offering integrated services and technology. They can reduce indirect costs like damage and waste that currently account for $166 billion annually. Major existing players focus on business-to-business or large packages, while e-commerce companies developed their own logistics for smaller deliveries. However, a gap remained for business-to-consumer and door-to-door delivery, which Delhivery was created to address.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    18 views1 page

    Delhivery - About The Industry

    Uploaded by

    Yash Purohit
    The logistics industry in India faces challenges due to the country's large population and many unplanned cities. Traditional postal services were inefficient. The market is now valued at $410 billion, though only 3.5% is organized. Organized players are expected to grow rapidly by offering integrated services and technology. They can reduce indirect costs like damage and waste that currently account for $166 billion annually. Major existing players focus on business-to-business or large packages, while e-commerce companies developed their own logistics for smaller deliveries. However, a gap remained for business-to-consumer and door-to-door delivery, which Delhivery was created to address.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    About the Industry

    Catering to a with a population of 1.25 billion people is a challenge for any industry and more of a
    challenge to the logistics industry of India. Such a densely populated country have a lot of issues in
    the last mile delivery in door to door segment, adding to this issue most of the cities are unplanned
    and the houses are not organized. The Indian Postal Services a government institution tried to cater
    to this market and pincodes were assigned to each and every area since a long time. The system
    used by this government institution became redundant and had a lot of inefficiencies causing a lot of
    time for the delivery to be shipped and also the cost was high.

    As of now the logistics industry in India is estimated to be valued at $410.75 Billion 1 (


    https://www.researchandmarkets.com/reports/5567003/india-logistics-market-2023-2028-by-
    transport#:~:text=The%20Indian%20Logistics%20Market%20was,at%20%24410.75%20Billion%20in
    %202022. ) which was only US$216 billion during the Fiscal year 2020. Thus, there are many players
    in the industry whose sizes also vary from a few thousand dollars to billion dollars in valuation.

    The logistics market is primarily comprised of transportation and warehousing, of which


    transportation accounted for 70% during 2020. Organized players accounted for only ~3.5% of the
    logistics market (road transportation, warehousing & supply chain services only) in Fiscal 2020.
    Organized players are expected to grow at a CAGR of 35% between Fiscal 2020 and Fiscal 2026,
    taking their share to 12.5-15% by Fiscal 2026 of the logistics market (road transportation,
    warehousing & supply-chain services only). This shift is expected to be driven by the ability of
    organized players to offer integrated services, network and scale-driven efficiencies and larger
    investments in technology and engineering, resulting in higher share of wallet with customers.
    Further, the Indian logistics industry is characterized by high indirect spends on account of high
    inventory carrying costs, pilferage, damage, and wastage. Indirect spends were estimated at US$174
    billion in Fiscal 2020 and are expected to marginally decline to US$166 billion by Fiscal 2026. This
    reduction will be led by organized players through superior logistics infrastructure that reduces
    pilferage and damages, efficient operations that reduce turnaround time and better utilize the
    logistics network capacity and through scale which drives consolidation and eliminates
    redundancies.2 (Taken from prospectus.)

    Some of the big players in the industry like blue dart having a market share of 36% which was largely
    in the organized sector and catered to B2B customers with high cost of shipment and was
    considered a premium player in the market. Other competitors like Safe Express did cater to the
    unorganized sectors but were hugely involved in the shipment of goods which were big packages like
    2-wheeler vehicles and furniture.

    E-commerce companies such as amazon and flipkart needed to develop their own logistics
    department to deliver door to door small size packages as there were no available player who could
    cater to their demand and the Indian Postal Services was unreliable. Flipkart developed ekart
    services and amazon developed ATS (Amazon Transportation Services).

    With all this in consideration there was still a huge gap in delivering items from B2C or even D2D,
    also the small businesses which actually want to sell their products online either needed to be listed
    on amazon’s or flipkart’s website to be able to use their delivery services if not they needed to rely
    mostly on the Indian Postal services. This gap was catered by Delhivery.

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