With changing lifestyles, consumers are shifting towards easy and quick services that will save them time and travel. The expansion of business to business and costumer to customer e-commerce websites has led to a significant rise in the demand for e-commerce logistics both in the domestic and international platform. Companies operating in the global e-commerce logistics market are aiming at providing a high degree of efficiency and transparency to their customers through high customized e-commerce logistics services. To maintain their profit margin, companies are also looking for methods to reduce the costs related to reverse logistics.
As per a recent report published by Transparency Market Research, the global e-commerce logistics market is projected to expand at a 20.6% CAGR from 2016 to 2024. In 2015, the global e-commerce logistics market was worth US$146.14 bn and is projected to touch a valuation of US$781 bn by 2024.
What factors are likely to aid the growth of the global e-commerce logistics market?
Innovative delivery techniques have gained significant popularity among companies providing logistic services. Consumers have also shifted their preference towards easy access logistics services. Rising penetration of mobile and internet has enabled consumers to avail facilities at a click of a button. As a result of this, there has been a significant rise in the online retail activities. Furthermore, the burgeoning acceptability of financial transactions done through online platforms are also likely to drive the growth of the global e-commerce logistics market in the upcoming years. The mushrooming number of e-commerce startups in Saudi Arabia, Mexico, Brazil, and India and other developing countries are further expected to augment the adoption e-commerce logistics.
To meet the needs of consumers and expand their business, leading e-commerce companies are entering into joint ventures with logistics service providers. For instance, recently, a leading logistics company in India, Patel Integrated Logistics entered into an agreement with Fetcher, a Dubai based delivery app. Together they are aiming at launching a dedicated e-commerce arm called DeliverEx.
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What factors are expected to hinder the growth of the global e-commerce logistics market?
The competitive rivalry in the global e-commerce logistics market is significantly high due to many companies already existing in the market and many new companies venturing into the market. To maintain their position in the market, companies are compelled to offer value-added services such as reverse logistics and free delivery. However, many companies do have a minimum value order limit for customers to take advantage of free delivery, there are considerable number of loopholes in the arrangement. For instance, customers order excess goods to avail free logistics services and then return the unwanted goods. As a result of this, the high cost incurred during the reverse logistics process increases the burden on the e-commerce logistics company. Another challenge being faced by e-commerce logistics providers is the infrastructural framework in developing regions such as problems with last-mile connectivity that limits the business.
What are the upcoming opportunities in the field of e-commerce logistics?
To curb the problems of last mile connectivity, leading companies are aiming at benefiting from the upcoming trend of drone delivery. Drones, parcelcopters, and droids are being considered as a revolutionary breakthrough in the e-commerce logistics delivery business. Many leading companies such as Amzaon.com, have started investing in drone delivery services. Amazon Prime Air service, for example, promises to deliver packages within 30 minutes. These new technologies are likely to provide lucrative growth opportunities to e-commerce logistics companies.
North America is expected to emerge as the dominant region by 2024 with a market worth US$48.32 bn. The leading players in the global e-commerce logistics market are DHL International, FedEx Corporation, Clipper Logistics Plc., Gati Limited, United Parcel Service, Inc., Kenco Group, Inc., XPO Logistics, Inc., and Aramex International.