The logistics sector and India’s largest third-party integrated logistics provider look set to go further in the year ahead
Here’s a simple timeline of events: Flipkart launched in India in 2007. Amazon launched 6 years later in 2013. And between this, in 2011, a company called Delhivery launched operations, and would go on to disrupt the Indian logistics industry, in no small part due to the e-commerce boom.
The Indian market can be a difficult one to navigate when it comes to logistics (no pun intended). India’s logistics sector is one of the largest in the world. High internet penetration and easier access to smartphones has contributed to a steep increase in the number of online shoppers, which in turn has led to rapid growth in the e-commerce sector and a parallel demand for better logistics solutions — something that Delhivery has been able to provide, and provide well.
The e-commerce logistics boom
According to data from Ken Research, the e-commerce logistics industry grew rapidly from FY 2015 to FY 2020, with a 24.3% annual revenue increase and a 27.4% rise in shipments. Key drivers include greater internet access, more smartphone users, increased online shopping, growing demand in smaller cities, new technologies, and rising expectations for faster delivery.
For consumers, e-commerce may seem like a two-step process: order and delivery. But what happens after an order is placed and before it is delivered – or order fulfillment – is what companies like Delhivery handle.
The Delhivery journey
Delhivery began in 2011 as a platform that delivered restaurant orders in under an hour. Founders Sahil Barua and Mohit Tandon saw a gap in the market after interacting with restaurant owners and delivery partners and launched in this segment, and expanded into e-commerce when they realised that there was a lot that could be done there as well. In a few years, Delhivery went from delivering food for restaurants, to an end-to-end warehouse and distribution logistics provider.
- Better tracking: In the early days, most e-commerce companies relied on physical couriers to ship their products, and tracking those orders manually, rather than using an e-commerce model like Delhivery, that has integrated services.
- Warehousing: Storage or warehousing was also an issue. Delhivery took care of that with their fulfilment centres, that take care of inventory management, order packing and shipping: a godsend for smaller e-commerce retailers who couldn’t afford their own warehousing and inventory management systems.
- Speed: Most courier companies in India take two to four days or more to deliver. With over 40 warehouses spread across India, Delhivery is able to keep up with that pace and deliver quickly. Plus, with multiple warehouses, they can handle all kinds of product categories, from electronics to apparel to even furniture.
- Returns: Indian consumers tend to return their products often, for a multitude of reasons. And again, because of a streamlined process and multiple warehouses, Delhivery is able to handle returns better as well.
Delhivery signed on their first e-commerce client, the now-shuttered apparel brand Urban Touch, in 2011, and since then, has expanded to include many, many more, like Nestasia, Fabric Pandit and Ajio.
Growth, IPO, and other milestones
Delhivery has grown to cater to multiple segments, including DTC brands, B2B enterprises, personal couriers and also has an AI-enabled tool to help predict, reduce and streamline returns. Here’s a snapshot of Delhivery’s growth and milestones:
- April 2021: Delhivery completed 1 billion cumulative shipments.
- May 2022: After multiple rounds of funding amounting to $310 million, from venture capital firms like Masayoshi Son’s SoftBank, Tiger Global, Nexus Venture Partners and The Carlyle Group, Delhivery went public in May 2022.
- February 2024: Delhivery turns profitable, with a 11.7 cr Q3 FY2024 PAT
- August 2024: Delhivery entered a strategic partnership with Teamglobal Logistics, a leader in ocean freight, offering transportation services between all major international cargo centres using a combination of land, sea and air modes. This partnership expands Delhivery’s Less than Container Load (LCL) service to over 120 countries, while Teamglobal will benefit from Delhivery’s extensive in-land Part Truckload (PTL) network covering 18,700+ pin codes in India.
- December 2024: Delhivery partners with RapidShyp, e-commerce shipping and courier aggregator, to enhance delivery speed and improve reverse logistics solutions across 18,700 pin codes. This partnership aims to revolutionise last-mile and return logistics, covering 99.5% of India’s population. The partnership includes reverse logistics, allowing RapidShyp to offer a complete range of delivery solutions for both outgoing and return shipments. This helps Delhivery manage returns seamlessly, reducing operational disruptions.
The logistics outlook for 2025
India’s e-commerce logistics industry is poised for significant growth, driven by rising demand from Tier 2 and smaller cities due to increased internet penetration and growing consumer expectations for faster deliveries.
- Growth in smaller towns and cities: The industry is projected to achieve a revenue CAGR of 23.6% during the forecast period from FY 2020 to FY 2025. The expansion of Fulfilment Centres in Tier 2 and below will likely increase to better serve the population in those areas.
- AI: Another trend that is shaping up is the use of AI-powered predictive analytics, that helps logistics providers anticipate and address issues before they impact operations.
- Localisation: The growing demand for faster deliveries has driven a shift towards hyper-local logistics, with companies localising supply chains and prioritising quick, regional delivery solutions. Global supply chains are susceptible to disruptions, including trade restrictions and natural disasters. Localising supply chains helps companies minimise their reliance on international suppliers, reduce risks, and improve agility.
The road ahead…
The logistics and e-commerce market are set to only grow further. The current number of 100 million online shoppers should grow to 350 million by 2025, with daily shipments growing from 8 to about 25 million, amounting to a 40% CAGR.
The dominant players in Indian e-commerce logistics are Amazon and Flipkart Group (Which consists of Flipkart and Myntra), with their own shipping services – Amazon Transportation Services, Ekart and Myntra Logistics.
However, when it comes to last-mile hubs, Ecom Express and Delhivery are the biggest players, with far more last-mile hubs that can cover more pin codes. Ecom Express covers over 25,000 pin codes, Delhivery caters to 18,700 pin codes, while Amazon Transportation Services and its franchise partners together cover only 12,000-14,000 pin codes.
And of course, there are the intra-city same-day delivery players as well, like Borzo (formerly WeFast) and Porter, which cater to the segments of quick delivery (orders delivered within a set time frame ranging from a few hours to a few days) and instant delivery (urgent deliveries within minutes to an hour).
Next stop for Delhivery?
Delhivery has the capability to address all of the 2025 logistics trends, with their existing infrastructure, strategic partnerships and tech tools. Given their ability to overcome challenges with smart business models – like a new focus on last-mile deliveries and return logistics – they will likely penetrate deeper and serve even more pin codes. All things considered, Delhivery is a company worth keeping an eye on, because it certainly looks like they can deliver gains in the long term, pun intended.