E-tailing in India is expected to grow 5 times to US$ 300 billion by 2030: Redseer Strategy Consultants

According to a report by Redseer Strategy Consultants, India's e-tailing business is set to increase by 5-fold, from US$ 59 billion in 2022 to an anticipated US$ 300 billion by 2030, driven by value-seeking 'mass' customers.

The report highlights the growing popularity of e-commerce in Tier 2 and beyond cities. This, together with an increasing number of 'mass' consumers and the rise of 3PL (third-party logistics) serviceability, is catalysing shipment quantities. As a result, these volumes are expected to climb faster than GMV growth.

With the approaching festive season, an increase in eTailing activity is expected, putting 3PL into closer focus. The Redseer report predicts the 3PL shipments to increase by 6-8 times from 2022 to 2030, going from US$ 2 billion in 2022 to a predicted US$ 13-17 billion in 2030.

Meesho seized the lead as the primary contributor to e-commerce 3PL shipments in India from January to August 2023. Other prominent participants were Flipkart, Ajio, and Amazon, with the rest shipments accounted for by vertical e-commerce platforms, D2C (direct-to-consumer) businesses, and smaller e-tailers.

Partner at Redseer Strategy Consultants, Mr. Mohit Rana said "3PL has become essential for mass-focused horizontals, significant verticals, and D2C brands. Partnering with 3PL for logistics needs not only accelerates market entry but also drives growth, addressing the challenges of erratic demand and optimising logistics investments per shipment".

As 3PL expands, shipment prices are expected to fall by 23%, from Rs. 60 (US$ 0.72) in 2023 to Rs. 47 (US$ 0.56) in 2030. According to the study, demand consolidation in smaller cities and regulatory changes are primary drivers of this cost decrease, promoting efficient resource use.

However, the report also highlights current 3PL sector difficulties, such as shipment protection, weight-related conflicts, return-to-origin processes, and responsiveness.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.