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Role of quick commerce in e-commerce logistics

In recent years, the landscape of e-commerce has undergone a seismic shift, propelled by the ever-growing demand for convenience, speed, and efficiency. This transformation has given rise to a new paradigm in the world of online retail: Quick Commerce (Q-commerce). As consumers increasingly seek instant gratification and seamless shopping experiences, the role of Q-commerce in e-commerce logistics has become more crucial than ever before.

Quick Commerce, often abbreviated as Q-commerce, refers to the delivery of goods to customers within an exceptionally short time frame, typically within an hour or less. This model represents the pinnacle of convenience and immediacy in online shopping, catering to the fast-paced lifestyles of modern consumers who prioritize instant access to products and services.

Traditionally, e-commerce logistics revolved around optimizing supply chain processes to ensure timely delivery of orders to customers. However, the emergence of Q-commerce has revolutionized this landscape by introducing unprecedented levels of speed and efficiency. Unlike traditional e-commerce models that focus on batch processing and scheduled deliveries, Q-commerce operates on a hyper-localized level, leveraging advanced technology and logistics infrastructure to fulfill orders rapidly.

The rise of e-commerce is nothing short of a revolution. Over the past few decades, it has experienced exponential growth, making it one of the most influential forces shaping the global economy. This growth has been further accelerated by the COVID-19 pandemic, which prompted even more consumers to shift their shopping habits online. The statistics are staggering: In 2020, global e-commerce sales reached $4.28 trillion, and by 2021, e-commerce accounted for nearly 18% of total retail sales worldwide. These numbers underscore the need for significant adaptations in transportation and warehousing strategies.

Key Components of Q-Commerce Logistics

The Impact of Q-Commerce on E-Commerce Logistics

The rise of Q-commerce has profound implications for the broader e-commerce logistics ecosystem. By prioritizing speed and convenience, Q-commerce redefines consumer expectations and sets new benchmarks for delivery performance. As a result, traditional e-commerce players are under pressure to adapt and streamline their logistics operations to remain competitive in an increasingly fast-paced market.

While Q-commerce offers numerous benefits, it also presents unique challenges and considerations for retailers and logistics providers:

The role of Quick Commerce in e-commerce logistics is transformative, reshaping the way retailers fulfill orders, engage customers, and compete in the digital marketplace. By prioritizing speed, convenience, and efficiency, Q-commerce delivers unparalleled value to consumers while driving innovation and optimization across the entire supply chain. As technology continues to advance and consumer expectations evolve, Q-commerce will undoubtedly remain a driving force in the future of e-commerce logistics, shaping the way we shop, consume, and experience the world of online retail.

To succeed in the dynamic e-commerce industry in India, companies must make technology investments, engage in strategic planning, and prioritize meeting customer expectations in a rapidly changing market. Meeting these demands requires specialized solutions that can only be provided by a trustworthy logistics partner like TVS SCS. With our experience in managing vast and complex supply-chain networks, we equipped with the necessary technologies and tracking tools to offer visibility throughout the entire supply chain.

TVS SCS boasts the ability to handle complex supply chains through skilled practitioners, a large warehousing network covering 19.5 million square feet, and end-to-end transportation solutions. This gives us a competitive advantage in the e-commerce logistics sector in India. Our technology infrastructure and value-added service portfolio can assist e-commerce companies in offering unique services to our customers. Through omnichannel model, brands can streamline their e-commerce or distribution processes with TVS SCS’s comprehensive logistics services. This includes managing inbound suppliers, warehousing fulfillment, transportation, customized services, material handling, and end-to-end product visibility.

Our technology portfolio, including applications such as Enterprise Resource Planning, Warehouse Management Systems, Transportation Management Systems, Track & Trace, Control tower, demand forecasting, and analytics tools, allows us to provide additional value in our logistics services for e-commerce in India.

Role of 3PL Service Provider in E-commerce Logistics

In India, e-commerce industry is growing rapidly and hence logistics requirements are constantly changing with the evolving business environment. This necessitates logistics supply chain industry players to upscale their operation on a timely basis, meeting the business requirements. Logistics challenges of e-commerce in India are many and some of the key challenges faced by logistics e-commerce companies in India are :

For any e-commerce business or e-commerce brand, properly coordinated logistics are the key to success hence choosing the right logistics partner for e-commerce in India is critical. E-Commerce is a part of the overall supply chain, and it is just another distribution model for storing, handling and distribution of products to the customers. That explains the criticality of overall e-Commerce logistics in India.

Efficient logistics is extremely critical for the success of an e-commerce brand. Automation of E-commerce Shipping & Fulfilment Operations with latest cutting-edge technology that uplift the whole supply chain processes and simplify customer services are the need of an hour, e-commerce brands look for following services from the logistics partner for e-commerce in India :Ā 

Regional or small logistics players in India will not be able to cope up with dynamic e-commerce logistics in India as they have limited expertise to do value add and invest in technology infrastructure. Reach of logistics partner for e-commerce in India in Tier II & III cities also become critical with increasing consumption base. Last mile reach of the logistics partner for e-commerce in India plays a critical role in outsourcing of e-commerce logistics companies in India. Digitisation of last mile services has become extremely critical, as best logistics companies in India for e-commerce must elevate their delivery experiences to differentiate themselves in a highly competitive space. Returns are high in the e-commerce sector and once again, a strong support system is needed to handle reverse movements and storage and to address logistics challenges of e-commerce in India.

The growth of e-commerce logistics in India has turned warehousing and distribution centres into mega fulfilment centres. The ability of the logistics partner for e-commerce in India to provide the needed infrastructure and handle huge volumes of daily transactions is extremely critical. Scalability of logistics partner for e-commerce in India plays a huge role with expanding e-commerce volumes which is one of the biggest logistics challenges of e-commerce in India.

E-commerce logistics in India requires specialised solutions, which can be only offered by trustworthy logistics partner for e-commerce in India like TVS SCS, which has experience of handling vast and complex supply-chain networks. It is fully equipped with the relevant technologies and tracking tools, which can offer visibility over the entire supply chain.Ā 

TVS SCSā€™s ability to manage complex supply chains with skilled practitioners, vast warehousing network of 19.5 Mn Sq. Ft. and ability to offer end-to-end transportation provides a competitive edge in the e-commerce logistics in India. The technology backbone and value added service portfolio could help e-commerce to offer differentiated services to their end customers.

Top 10 Logistics services offered by Companies in India for e-Commerce

Supply chain is a vital and challenging part for any e-commerce business, logistics services for ecommerce in India covers transfer of goods, keepingĀ track of inventory levels, managing a warehouse, storage, picking, and packing orders, shipping products to customers, network optimization, end-to-end transportation solutions and delivery tracking. Thus, putting brands as well as best logistics companies in India for ecommerce, under tremendous immense pressure – How to deliver anything, anytime and anywhere and that is where the omnichannel distribution model has become the ultimate solution to simplify the logistics process for big businesses.

Omnichannel distributionĀ is an integrated solution that unifies operations and product flows across all channels. A comprehensive omnichannel distribution strategy allows brands to cope with the demands and address logistics challenges of ecommerce in India to make the customer experience seamless. E-commerce logistics companies in India help brands in all processes related to shipping, inventory visibility, in-store customer pick-ups, network speed, and agility to ensure a positive experience for their customers. Also, return of the products, services or return logistics make it a more efficient and customer-oriented solution.

In ecommerce, many brands struggle with their omnichannel model given its supply chain requirements, particularly in terms of speed, complexity, and efficiency. To achieve excellence in an omnichannel environment, brands must address the following logistics challenges of ecommerce in India:Ā 

For any brand, it takes a lot to implement a true cost effective and efficient omnichannel distribution strategy, including expertise in ecommerce, business-to-business, direct-to-consumer, direct-to-store, reverse logistics, flexible one-day and two-day shipping options, and more. The tools and technologies that make it easier for e-commerce logistics companies in India to implement their distribution model strategy includes WMS (Warehouse Management System), OMS (Order Management System), package optimization system and special Transportation Management System (TMS).Ā 

The rapid growth of ecommerce brands is heavily dependent on technologies for their omnichannel distribution model. The technology helps brands in reducing complexity of their supply chain network and its cost. The brands are using technology across its supply chain to run the ā€œsmart sharingā€ of inventory across channels. Technologically advanced inventory and warehouse management systems implemented to ensure visibility and seamlessness. An inventory management system/ WMS allows the entire supply chain with real-time visibility to help customers with accurate demand and forecasting of their inventory, TMS in optimizing delivery along with return logistics and OMS (order management system) in synchronising the channels. Therefore, selecting the right technology solutions to automate the complete process is essential for e-commerce logistics company in India. The inventory management system, order management system, and all the software that a brand uses must integrate and satisfy their needs as well as future requirements.

Therefore, a successful omnichannel distribution strategy requires best logistics companies in India for ecommerce with a network of fulfilment locations, connected technology, and expertise in the ecommerce supply chain.Ā 

TVS SCS has experience in handling supply chain logistics, and it has been working with multiple industries, valuable insights thus gained have given deeper of the fulfilment needs of B2C and B2B clients, it is one of the best logistics companies in India for ecommerce. Its omnichannel model enables the brands to streamline their e-commerce or distribution processes significantly through their end-to-end logistics services for ecommerce in India ā€”from inbound supplier management and warehousing fulfilment to transport and customised services to material handling and end-to-end visibility of the products.Ā  The technology portfolio of applications such as Enterprise Resource Planning (Msys.ERP), WMS, TMS, Track & Trace, Control tower, demand forecasting and analytics tools allows it to offer value addition in logistics services for ecommerce in India.Ā 

Top Reasons to Outsource Logistics Services For Businesses

The Indian and global logistics market present a significant opportunity, with direct spends on logistics in India expected to grow at a CAGR of 15% to approximately US$365 billion by Fiscal 2026 from Fiscal 2021 and globally expected to grow approximately to US$ 13,189 billion by 2025 from 2020 (Source: RedSeer Report). Moreover, the COVID-19 pandemic has further made organizations realize supply chain complexity. As a result, there is an increasing trend toward end-to-end outsourcing, and organizations are looking forward to engaging supply chain companies to manage their supply chain and logistics requirements and offer additional specialized services.

Increasing outsourcing of operations and the need to focus on core competence has led to high demand for integrated logistics services; and the increased importance of digital technology incorporation in the value chain, increasing the demand for integrated logistics.

The rapid growth pace and the reliance on technology make it difficult for many companies to provide consistently high levels of service while handling logistics in-house. Increasing outsourcing of operations and the need to focus on core competence has led to high demand for integrated logistics services.

Increases in supply chain complexity have driven many companies to engage the help of third-party logistics providers as logistics and regulatory specialists. In turn, third-party logistics providers with expertise in international transportation management, warehousing, and distribution provide economies with the operational ā€˜backboneā€™ supporting global trade. In addition, the COVID-19 pandemic has made companies further realize the complexity of supply chains. As a result, the demand for endā€toā€end outsourcing continues to rise. Organizations are increasingly open to engaging third-party logistics providers to manage their logistics and supply chain requirements.

Structural shifts in the industry have made supply chains increasingly complex, necessitating an increasing reliance on technology to ensure high service levels. Sub-scale and predominantly manual operations have led to under-investment in technology and data capabilities by most traditional Indian logistics players. This has prevented companies from responding to changing customer needs, optimizing networks, efficiently utilizing capacity and improving customer service. As a result, technology is critical and creates differentiation by increasing outsourcing to supply chain providers and customer stickiness, allowing customization at all scale levels and upgrading customersā€™ logistic costs into supply chain insights.

The rapid growth pace and the reliance on technology make it difficult for many companies to provide consistently high levels of service while handling logistics in-house. Increasing outsourcing of operations and the need to focus on core competence has led to high demand for integrated logistics services.

Developed countries with longstanding transportation and warehouse contracting practices have the most significant 3PL revenues. Developing countries are growing at faster rates but have lower total 3PL revenues. The numbers reflect the greater outsourcing of functions to 3PLs in developed and more economically sophisticated countries.
Through varied in-house expertise and strategic acquisitions of businesses with differentiated domain expertise, TVS SCS has evolved into a provider of value-added solutions with a robust technology ecosystem.

TVS SCS has focused on moving up the customerā€™s value chain with various technology-based solutions. TVS SCS has helped its customers seamlessly run operations by solving supply chain complexities using a technology platform. Solutions also involve customers outsourcing their complete supply chain on an end-to-end basis. TVS SCS developed partnerships with customers across diverse and high-growth industries, which offer various outsourcing opportunities.

What will be the Future of Logistics Industry

The Indian logistics sector is one of the largest in the world and presents a large addressable opportunity. The sector is critical for the country’s economic growth as it connects various elements of the economy and consists of transportation, warehousing and other supply-chain solutions ranging from the suppliers to the end customers.

The logistics market is large and projected to grow sustainably for the next five years.

The Indian logistics sector is one of the world’s largest and critical for the country’s economic growth. As of Fiscal 2021, the Indian logistics market size stood at US$382 billion and is projected to grow to US$531 billion by Fiscal 2026 (Source: Chamber of Commerce ā€“ India, Report on Logistics, India Economics Survey 2017-18, 2019-20, RedSeer Estimates), driven by the following factors:

As a percentage of GDP, India’s logistics spending is significantly higher than developed countries (refers to the United States and Europe), largely due to the high incidence of indirect spending. This is similar to China (approximately 15%) as against approximately 8% in the US and Germany (Source: RedSeer Research, RedSeer Analysis).

Logistics spends in India has been growing faster than large global economies and continue to outgrow them.

The Indian logistics market has been highly fragmented and has experienced rapid growth in the organized market in recent years. Indian logistics market has grown from USD 342 billion to USD 382 billion between 2018 – 2020, at a CAGR of approximately 6%. This is more than the growth the Chinese and American markets experienced during the same period at a CAGR of approximately 5% and approximately (1)%, respectively.

The Indian logistics market is projected to grow at a higher CAGR of approximately 7% between 2020 and 2025. During the same period, the Chinese logistics market is expected to expand at a CAGR of approximately 6%, while the US market is expected to expand at a CAGR of approximately 3% (Source: RedSeer Research, RedSeer Analysis).

Direct logistics is estimated at approximately US$180 billion in FY 2021 and is projected to grow at a CAGR of approximately 15% until FY 2026.

Increasing complexities in supply chain solutions are driving the trend of outsourcing logistics services to expert third parties. The Indian logistics market presents a large addressable opportunity, with direct spends on logistics of US$216 billion in Fiscal 2020 and US$180 billion in Fiscal 2021 and is expected to grow to approximately US$365 billion by Fiscal 2026 at a CAGR of 15% from Fiscal 2021 to Fiscal 2026. Out of this market opportunity, the size of the outsourced supply chain solutions market (excluding e-commerce) in Fiscal 2021 was US$5.9-6.1 billion, which is expected to grow at a CAGR of 25-27% to approximately US$18-20 billion by Fiscal 2026 (Source: RedSeer Research, RedSeer Analysis).

The direct logistics market primarily comprises transportation and warehousing, of which transportation accounted for 70%, or US$151 billion in Fiscal 2020 and 64%, or US$180 billion in Fiscal 2021.

Organized players accounted for only approximately 3.5% of the logistics market segments (which includes road transportation and warehousing and supply chain services only) in Fiscal 2020. Organized players are expected to grow at a CAGR of approximately 35% between Fiscal 2020 and Fiscal 2026, taking their share to 12.5%-15% by Fiscal 2026 (Source: RedSeer Research, RedSeer Analysis).

This shift is expected to be driven by the ability of organized players to offer integrated services, network and scale-driven efficiencies and larger investments in technology and engineering, resulting in a higher share of wallet with customers.

Across key logistics service offerings, there is an increasing need for supply chain solutions. Industry players are looking for customized, integrated logistics service offerings from a single external supply chain partner.

TVS SCS is among India’s largest and fastest-growing integrated supply chain solutions providers with global capabilities and cross-deployment networks across the value chain. For the last 15 years, TVS SCS has managed large and complex supply chains across multiple industries in India and select global markets through customized tech-enabled solutions.