eTailing in India to see 5x growth from $59 bn to $300 bn between 2022 and 2030

• eTailing is expected to drive 3PL shipments 6-8x between 2022 and 2030
• eTailing in India is expected to grow 5x from US $59 Bn to US $300 Bn between 2022 and 2030 with > 45% of 2030 GMV driven by ‘mass’ consumers
• The number of eTailing shipments in India delivered by 3PL is expected to be 13-17 Bn by 2030, which is 6-8x of 2022 levels
• Basis the average share of the eCommerce 3PL shipments in Jan-Aug 2023, Meesho emerged as the largest eCommerce 3PL shipment contributor in India, with Flipkart, Ajio, and Amazon as the others among the top 4 players. The rest of the shipments are driven by vertical eCommerce platforms, D2C brands and other smaller e-tailers
• Scaling of 3PLs is likely to reduce shipping costs by 23% by 2030

The Indian festive season this year is set to unleash a surge in eTailing activity, propelling third-party logistics (3PL) to the forefront of the industry. A recent report by Redseer Strategy Consultants predicts a 6 to 8-fold growth in 3PL shipments between 2022 and 2030 – from 2 billion in 2022 to an estimated 13-17 billion in 2030.

The report highlights that the eTailing landscape in India is on track to witness a fivefold increase, from $59 billion in 2022 to a projected $300 billion by 2030, driven by ‘Mass’ consumers who are looking for value at affordable prices. According to the report, greater adoption of e-commerce in Tier-2+ cities, increasing ‘Mass’ consumers, along with increased 3PL serviceability are propelling shipment volumes. As a result, shipment volumes are expected to grow disproportionately relative to GMV growth.

Basis the average share of the eCommerce 3PL shipments in Jan-Aug 2023,  Meesho emerged as the largest eCommerce 3PL shipment contributor in India, with Flipkart, Ajio, and Amazon as the others among the top 4 players. The rest of the shipments are driven by vertical eCommerce platforms, D2C brands and other smaller e-tailers.

Commenting on the role of third-party logistics in eTailing, Mohit Rana, partner at Redseer Strategy Consultants, said, “3PL has emerged as an indispensable enabler for mass-focused horizontals, large verticals and Direct-to-Consumer (D2C) brands. Collaborating with 3PL for logistics requirements expedites market entry, drives growth, and addresses the challenges of lumpy demand, thereby optimising logistics investments per shipped unit.”

As the 3PL scales, the cost per shipment is projected to decrease by 23%, dropping from Rs 60 in 2023 to Rs 47 by 2030. The report identifies demand aggregation in smaller cities and policy adjustments as pivotal factors contributing to cost savings, fostering the optimal utilisation of resources.

While acknowledging the immense potential of 3PL, the report also highlights challenges that the sector is trying to solve for now, including shipment protection, weight-related disputes, return-to-origin processes, and responsiveness.