Current scinario of 3PL industry in the e-commerce context

Abstract

E-commerce, with its extravagantly high growth rates, has dramatically changed the Indian consumer market over the last decade. Third-party logistics (3PL) has been one of the backbones of this industry. While the E-commerce sector grew, new age 3PL companies like Delhivery and Gati have expanded their operations phenomenally and strengthened their hold as preferred logistics partners. However, traditional 3PL companies, at the same time, are undergoing slow growth and declining profits. In this analysis, we attempt to study logistics in the e-commerce industry in detail, to understand the entire supply chain structure, growth drivers, market dynamics and their changing requirements. This report analyses the cost structure in e-commerce logistics and its variability according to the product category. We would also look at the different types of 3PL, such as traditional and new age, and understand their market dynamics. Moreover, to analyze their competitive scenario, this report studies changing cost structures of these 3PLs and its impact on their margins. In the conclusion, this report assesses the suitability of a logistics mix (Ex. In-house, outsources and hybrid), in the context of e-retailer’s business model.