India Third-Party Logistics (3PL) Market

INDIA-THIRD PARTY LOGISTICS (3PL) MARKET 2018 - 2029

Market Definitions

External service providers for logistical requirements like warehousing, distribution, packaging, and more are known as third-party logistics, or 3PL. These service providers are experts in these fields of operation. Depending on a number of variables, they can scale their services to match the requirements and demands of their clients. These could be uncontrollable external business factors or internal business factors.

In addition to logistics, many 3PL service providers regularly help clients with product procurement and/or production. This guarantees that using third-party providers will enable the eCommerce business to increase its profits. They thus have a significant impact on how eCommerce vendors integrate their supply chains.

Scope of the Report

This report analyzes key market parameters, identifies growth drivers, and profiles major industry players within the 3PL Logistics market. These insights support our market estimations and growth projections for the forecast period. Additionally, we examine the revenue generated by different 3PL logistics services across various Indian markets. Furthermore, we highlight emerging trends in the 3PL Logistics industry and provide detailed profiles of leading vendors. Lastly, we assess the impact of the pandemic on the 3PL Logistics market landscape.

Study Parameters

Base Currency:

The United States Dollar (USD) is the base currency for this study.

Base Year:

The base year for this study is 2023, selected based on the availability of annual reports and secondary research information.

Review Period:

The review period for this study spans from 2018 to 2029.

CAGR:

The Compound Annual Growth Rate (CAGR) is calculated for the forecast period from 2024 to 2029.

Market Scope

Executive Summary

Market Overview & Insights

• The Indian third-party logistics (3PL) industry is rapidly expanding, with a value of USD 29.87 billion in 2023 and a forecast CAGR of 20.2% from 2024 to 2029.
• Several major factors are helping the industry landscape, driving this expansion. Leading companies are shifting manufacturing to India, which is driving up demand for warehousing and logistics.
• The government's Production Linked Incentive (PLI) policy supporting local manufacturing to increasing demand. Similarly, the industry has seen technological breakthroughs, with warehouses leveraging IoT, robotics, and AI to expand solutions across the value chain.
• The COVID-19 pandemic had a significant effect on the logistics industry, raising warehousing and logistics market share from 2% in 2020 to 20% by 2021. During the epidemic, there was a global movement towards essential internet purchases, which fuelled this need even higher.
• The 3PL sector is positioned to play a big role in India's economic growth, particularly in meeting the aim of becoming a $5 trillion economy by fiscal year 2025. These increases highlight the revolutionary changes in India's 3PL business, which are being driven by economic shifts, technological innovations, and shifting client behaviours.

Analyst Opinion: The growing e-commerce market in India, driven by changing consumer behaviours following the pandemic, represents another significant growth opportunity for 3PL providers. The growing demand for last-mile delivery, reverse logistics, and omnichannel fulfilment services presents profitable opportunities for market expansion.

Segment Outlook

Region Outlook

Competitive Intelligence

• Indian third-party logistics (3PL) market to increase significantly, with a value of USD 40.02 billion in 2023, with a predicted CAGR of 15.6% between 2024 and 2029.
• The main drivers of this rise include the growth of e-commerce, greater manufacturing activity, and the development of new logistical technology.
• There are several prospects for growth and consolidation due to the market fragmented nature. Due to its wide global network for high-value international logistics, DHL leads the business with a 28.16% market share. Blue Dart is a wide network in India and it is part of DHL uses artificial intelligence-powered chatbots and algorithms for route optimisation.
• All Cargo Logistics Limited has a 5.48% market share in India and provides a comprehensive range of network services and local knowledge.
• Emerging players, such as Delhivery (2.25% market share), are maintaining their industry position through technology-driven activities. Delhivery's $235 million acquisition of Spoton Logistics, which strengthens its B2B capabilities, demonstrates the company's strategy of service diversification and network expansion.
• Since the COVID-19 pandemic, B2B and B2C have grown increasingly dependent on digital logistics. FedEx (1.50% market share) has invested on automation and contactless delivery technology, while e-commerce companies like Xpressbees (0.77%) and Ecom Express (0.79%) are gaining traction in Tier 2 and 3 cities in India. The market is looking for opportunities to grow, as shown by Xpressbees' most recent $110 million investment round.
• Mahindra Logistics, which accounts for 1.67% of the market, aiming to achieve carbon neutrality by 2040. The National Logistics Policy, published in September 2022, aims to reduce logistics costs from 13-14% of GDP to single digits. This will benefit GATI company with strong domestic networks (0.52 percent market share).

Companies Key Activities

Company Profiles

DHL Group – Company Overview

EST Year	1995
CEO	Tobias Meyer
Website	group.dhl.com
Location	Charles-de-Gaulle-Straße 20, 53113 Bonn, Germany
Employee Size (2023)	159,265
Revenue (2023)	88,298.64 Million US$
Industry	Global Forwarding, Freight, Supply Chain, eCommerce

• DHL Group, often known as Deutsche Post DHL Group (DPDHL), is a global leader in mail and logistics services. Headquartered in Bonn, Germany, the corporation provides a wide range of services under two principal brands: DHL for logistics and Deutsche Post for postal services.
• The company's global network includes more than 220 countries and territories, serving both individual and commercial customers throughout Europe, the Americas, the Middle East, Africa, and Asia-Pacific.
• In India, DPDHL operates through its subsidiary, Blue Dart Express Ltd., which has been a member of the group since 2005. Blue Dart is South Asia's leading fast air and integrated transportation firm, providing secure and reliable delivery to over 55,400 sites across India.
• Blue Dart, a crucial component of DHL's eCommerce division, uses DPDHL's extensive global network to offer a wide range of services such as air express, freight forwarding, supply chain solutions and customs clearance.
• Blue Dart and DHL formed a strategic collaboration in 2002, which was strengthened by DHL's majority stake acquisition, and the combined firm has emerged as a dominant player in both domestic and international express services in India. This partnership enables them to provide consumers with a broad suite of express and logistics options, ranging from local delivery to high-end international logistical services.

Market Dynamics

Historical Market Drivers 2018 - 2023

Expansion of E-commerce Business

• The Indian e-commerce market experienced rapid growth, increasing demand for third-party logistics (3PL) services during 2018 to 2023. The India Brand Equity Foundation (IBEF) projects that by 2026, the nation's e-commerce business will be worth $200 billion, or around Rs. 16.69 lakh crore. This will be a major factor to boost the ecommerce retail sector.
• Consumer behaviour has shifted towards to online shopping and it is expected that global e-commerce revenues will reach an incredible $7 trillion by 2025. In addition, the increased the need for logistics companies to grow and adapt. Effective logistics services solution are important for online retailers due their business now depends on rapid and precise order fulfilment.
• Millions of consumers have used to e-commerce platforms due to their easy and convenience option. The India's e-commerce business would grow to $325 billion by 2025, with third-party logistics companies managing over 17 billion shipments over the period of the following years.
• The part Digital India' initiative, there are currently over 936.16 million internet subscribers in India, of which 350 million are actively using the internet service. It will be about 895 million internet connections by the end June 2023, of which over half are in cities and 97% are wireless. The number of smartphone users globally is estimated to reach 1.1 billion by 2025, significantly expanding the digital transformation.
• The growth of e-commerce in India has been fuelled by significant advances in internet access and smartphone penetration, as well as improved profitability. Direct-to-consumer (D2C), consumer-to-business (C2B), business-to-business (B2B), and consumer-to-consumer (C2C) have the business commerce services that have emerged and prospered. E-commerce is set to rise, with the direct-to-consumer category alone predicted to exceed $60 billion by FY27. In response to this expansion, logistics companies have increased their capacity. The renowed companies like Shadowfax, Loadshare, and Ecom Express have invested heavily in quick delivery systems to capitalise on the rising volume of orders. The business is thriving, as evidenced by innovations like Ecom Delivery's distinctive e-commerce logistics solutions and Blue Dart's drone delivery service.In summary, there was a significant shift in the Indian e-commerce market between 2018 and 2023, which has clear implications for 3PL companies. As the e-commerce sector grows, India's retail future will continue to be determined by the need for innovative and efficient logistics solutions.

ABOUT US

I’m Manish, a Senior Research Analyst with a strong background in delivering accurate and insightful market research reports. Our work is grounded in a robust combination of primary and secondary research methodologies, ensuring a comprehensive understanding of market dynamics and trends.

We utilize standard research approaches such as top-down and bottom-up methodologies to derive precise and actionable data. Primary research involves collecting firsthand information through interviews, surveys, and real-time observations from key industry players, stakeholders, and consumers. On the other hand, secondary research leverages credible sources like industry publications, government databases, and market reports to validate and enrich our findings.

Our forecasting models are built on advanced analytics, incorporating multiple methodologies to predict trends. These insights are dynamically adjusted to account for real-time changes and future scenarios, ensuring the most reliable and up-to-date data.