Opportunities of same day delivery

in India from 3pl player perspective

By Kiran Jagtap, 28th Jan 2019

Statutory Note

 This report has been done with help of both primary and
secondary research methods
 Primary research is done with the method of collecting
responses through online questionnaire, the sample size is
43, one international respondent and rest were from India
and one F2F interview with supply chain professional.
 Secondary research is done using online articles, news
and ordering samples of paid reports from market
research companies.
Important Definitions
What is same day delivery?
 A delivery between sunup and sundown on a weekday. A
product when ordered (Mostly online) before some cut out
time (Average 1 pm local time), will be delivered in few hours
and/or the same day. Same-day delivery is a game changer
because it combines the immediate product availability of retail
with the convenience of ordering from home.
What is 3PL?
 Third-party logistics (abbreviated 3PL, or sometimes TPL) in
logistics and supply chain management is a company's use of
third-party businesses to outsource elements of the Indian
market is predicted to grow at around 5% CAGR during 2016
to 2024 (forecast period).
Outcome of Primary Research

Profession Online buying frequency

Avg. Basket Size Frequency of same day delivery

Outcome of Primary Research Cont.

Preference for same day delivery

Preferred categories for same day delivery

Market size estimation

 Frequency of online orders in India is 6 times in a year

 Average basket size is 2.5 product/basket(order)
 Average products ordered online/year = 6*2.5 = 15
products/person/year
 70 % of these 15 products are either ordered by same day or
next day delivery i.e. = 0.7*15 = 10.5 products/person/year
 70% people will prefer same day delivery by paying extra
charges.
 100 million online shoppers in India(2016) from which 80% are
travel, movie, digital records shoppers combined, so physical
goods shoppers are 20 million
Market size estimation Cont.

 Number of products preferred by same day delivery =

20*10.5 = 210 million products/year
 Number of Shipments/volumes = 210/6 =35 million/year
 Monetary size of same day delivery market = 35*150 = 5250
million rs = 525 cr rs./year (Ref: Amazon same day delivery
150rs)

Est. Same Day Delivery

Market in India

35 Mn/Year 525 Cr Rs./Year

No. of Shipments Market Value
Interview with a supply chain professional

 Amazon and flipkart are developing small vendors in tier 2 and

tier 3 cities who can purchase and store the inventory
themselves and take care of last mile by them or any 3pl
preferred by them
 According to new FDI norms about B2C, Amazon, flipkart and
other foreign players need to move to pure market place
model from 1st Feb 2019. This is going to affect the business of
foreign players but it will benefit Indian ecommerce players like
Tataqlik, AJIO etc.
 So rather than leasing big warehouses foreign players are
looking to develop small vendors who can own the inventory
and act like a franchisee.
 3pl players need to focus on these kind of small vendors
especially in tier 2 cities
Secondary research

 The Indian e-commerce market of USD 35 billion is expected

to grow at 25 per cent in the next five years and exceed USD
100 billion by 2022.
 Nearly 24% of online customers believe that same-day shipping
is important.
 Mr. Mukesh Ambani announced that his company is working on
creating the world's largest online-to-offline new commerce
platform that would integrate the power of Reliance Retail's
physical marketplace with Jio's infrastructure and services. This
ecommerce venture is likely to take off by April 2019
 Amazon pilots 'Faster than Same Day' delivery service of
smartphones in Delhi-NCR
Long term view of E-tailing logistics using 3D
printing technology.

 Small and gifting items without structural complexity can be

printed/manufactured using 3D printer eg. Phone covers
 This ecosystem will be very similar to the restaurants, when
you order from online food ordering apps (Swiggy, Zomato
etc). the order gets received and restaurant starts preparing
the food, meanwhile delivery agent/person get assigned to this
order and the order gets delivered in an hour.
 In this same example restaurants will get replaced by 3D
printing hubs and will print/manufactures the products as and
when order receives. And delivery can be managed by 3PL.
 Further if we can install a 3D printing machine in delivery
trucks/vans, it can make a product while in transit.
 This delivery truck can go to location where orders are more,
station itself, manufactures and then distributing them or just
act like a self pick up point for customers, same model as of
Food trucks
Thank You