The demand for direct-to-consumer brands in the e-commerce space is expected to drive the shipment volumes to more than double to 2.7 billion in the next four years. Third-party logistics players play a major role in this growth.
As the demand for D2C products continues to surge, their logistics demands increase. This was seen in annual D2C shipments which went from about 0.1 billion in 2019 to 0.6 billion in 2023, according to RedSeer Consultants. By 2028, the market could hit around 2.2-2.7 billion shipments, at a 35-40 per cent CAGR from 2023 to 2028.
In today’s fast-paced realm of commerce, new-age Indian Direct-to-Consumer (D2C) brands are sprinting ahead. A significant portion of this success can be attributed to the indispensable services of Third-Party Logistics (3PL) providers like Delhivery, Ecom Express, Shadowfox and Xpress Bees.
Logistics isn’t just a part of the brand; it’s practically the backbone of it. It encompasses services like transportation, warehousing, packaging, inventory management, etc. For smaller brands logistics constitutes 10-18 per cent of the overall expense, but this tends to reduce to approximately 6-14 per cent as brands attain scale.
While 3PL providers offer comprehensive end-to-end solutions, from warehousing to transportation, aggregators act as intermediaries, connecting businesses with various logistics service providers on a single platform, which is especially useful for smaller D2C brands and local businesses. On the other hand, vertical service providers specialize in niche logistic services, catering to specific logistics needs, such as last-mile delivery and hyperlocal services.