India poised for a logistics revolution

Over the last few years, India’s logistics industry has witnessed a paradigm shift, thanks to the renewed emphasis laid by the Government of India on strengthening the sector. Several initiatives, such as ‘Aatmanirbhar Bharat’, ‘Make in India’, ‘GST’, ‘PM GatiShakti Plan’, etc., have been undertaken to position India as a global supply chain hub.

Today, the logistics market is pegged at around USD 250 billion and is growing at a CAGR of 10.5%. Despite being largely unorganized, the sector contributes to nearly 11 percent of India’s GDP.

E-commerce Disruption

In the last two years, especially due to the Covid-19 pandemic, the E-commerce industry has changed the dynamics of the logistics sector. The traditional distribution models are getting disrupted due to the rising demand for same-day delivery of essentials, be it groceries, medicines, household essentials, or even fashion.

This has forced the logistics industry to realign its business strategies, alter operations and adapt to the evolving scenario to take advantage of the unprecedented growth.

Changing Dynamics

For an e-commerce platform, last-mile delivery is crucial as the seasonality-based demand is no longer true for most products. Consumer behavior, especially of the tech-savvy Gen Z and millennials, is significantly changing. Interestingly, the demand is not restricted to metros, but it has also spilled over to tier 2 and 3 cities. In some states, e-commerce platforms have made inroads into remote towns.

Today, buying decisions are made depending on the speed of delivery, the way it is delivered, ease of its return process, packaging used, and the charges levied for delivery.

Additionally, the emergence of direct-to-consumer or D2C Brands disrupts the e-commerce industry. Another evolving concept in the D2C space is hyperlocal distribution, where deliveries are carried out in a small geographical area and completed within a few hours.

To remain competitive in this volatile scenario, the e-commerce/hyperlocal industry is collaborating with logistics players and forging alliances with third-party logistics (3PL) services providers to ensure express deliveries. Therefore, it has become prudent for logistics players to have a wide coverage across different pin codes to provide intracity logistics services.

End-to-end Supply Chain

Today, pure-play logistics is a thing of the past. Brands that don’t want to re-invent supply chains themselves but focus on product quality are collaborating with e-commerce logistics players who can provide services like online tracking of consignments, reverse pickup facilities for returns and exchanges, and give them the right forecast, inventory storage, and success of the product within days that control manufacturing. This calls for more real-time feedback from consumers to the brands and is possible only via data exchange.

Modernising Warehousing

Along with the logistics sector, the warehousing sector is also witnessing a paradigm shift with the adoption of advanced technologies. Be it large warehouses or micro warehousing, advanced equipment, controls, IoT and sensors, and agile processes are widely used to meet the demand variability so that the throughput of the warehouse is enhanced. Wearables and new-age tech like Pick-To-Light are revolutionizing the traditional four-walled inventory management solutions.

In summary, the logistics sector is indeed poised for robust growth. Recognizing the changing dynamics, players will have to realign strategies and cause disruptions to existing models to sustain in this highly competitive business.

Blowhorn is one of the few startups that have transformed the supply chain landscape in India by providing effective solutions with standard pricing and an organized fleet powered by a strong technology platform. Today, Blowhorn caters to a large number of e-commerce platforms and small enterprises to provide end-to-end solutions like micro warehousing and distribution, same-day and last-mile delivery, on-demand delivery solutions with state-of-the-art tracking facility, and scheduled transportation help scale-up businesses with increased operational efficiency. Blowhorn is also one of the few logistics players to adopt a green fleet to build an efficient intracity transportation network.