Festive Season Demand: Ecommerce logistics players gear up for heavy load

Analysts predict a 2-3x increase in volumes as companies hire more talent and ramp up capacity

Published: Sep 5, 2022 01:13:18 PM IST

Updated: Sep 5, 2022 01:14:54 PM IST

For ecommerce logistics, the demand through the year is stable.

Towards the end of August, fully-integrated logistics provider Delhivery announced its plans to create over 75,000 seasonal jobs pan-India in the next six weeks. Reason? The significantly high volumes during the festive season—both for its parcel and express part-truckload business. It’s not just Delhivery, but all ecommerce logistics players are gearing up for the festive season.

Given the high demand, players like Amazon and Flipkart are also expected to use third-party logistics companies such as Delhivery, Shiprocket, Xpressbees and Ecom Express. “We are predicting a 50 percent increase in demand and are all set to support our sellers to deliver a seamless customer experience,” says Saahil Goel, co-founder and CEO, Shiprocket.

The company has significantly ramped up capacity in its 45+ fulfilment centres across India and is using its AI-led platform, CORE (Courier Recommendation Engine) to optimise operations. Goel adds, “The festive season will be a critical period for ecommerce sellers as it will provide real insight into consumer spending for the next year. We feel that there may be lower growth in spending y-o-y (year-on-year) but overall there will still be strong demand this festive season.”

Delhivery has also expanded its infrastructural footprint by a million sq ft in the first quarter of FY23. Ajith Pai, chief operating officer, Delhivery, stated in a press release, “Our fully-automated mega gateway at Tauru went live in April this year and is equipped with automated parcel and hub sortation to drive efficiency across both B2C and B2B supply chains. Additionally, we are beefing up our pan-India parcel sortation capacity by 1.5 million shipments a day to meet the heightened customer demands."

Also read: Festive Season Demand: Cheer missing in rural markets

The size of the ecommerce logistics market in India was at $2.93 billion in 2019 and is expected to touch $48 billion by 2027, as per the India E-commerce Logistics Market Forecast 2020-2027. “When we came out of the Covid-19 lockdowns, there was a massive spike due to pent-up demand. The last 12 months have been like a golden run for Indian ecommerce logistics players,” says Prahlad Tanwar, partner and global head of logistics & postal services, KPMG in India.

Also read: Festive season demand for home appliances, white goods subdued in H1 2022; likely to pick up in H2

For ecommerce logistics, the demand through the year is stable. “But during the festive season weeks,” adds Tanwar, “demand just goes off the charts. We’ve seen the volumes go up by 2-3x during the festive season. It’s a great time for logistics companies because that’s when they really have an opportunity to increase and optimise their capacity capabilities and also potentially charge a bit more.”