Page 6 - ITLN July - Aug 2023 for Magzter

Cover Story
E-commerce
Logistics

INDIAN E-COMMERCE LOGISTICS
Shifting

focus from

top line to

bottom line

Indian e-commerce and logistics are shifting gears.
But it is no more about growth or scaling up. Quite
the opposite. They are scaling down and in search
of profitability. Does that mean consolidations?
What is the impact on shippers/sellers?
Libin Chacko Kurian

nvestments are not as free- expected to grow at a compound annual
flowing as they were earlier growth rate (CAGR) of 27 percent to
and everybody realised that the reach $163 billion by 2026, almost
I value of money is higher than three times the growth of the overall
what they thought earlier.” retail market. However, in its May 2023
This is how Dipanjan Banerjee, E-commerce Consumer Confidence
chief business officer of Ecom Express Index, Redseer noted that consumption
described the current e-commerce and growth in recent quarters was tepid
e-commerce logistics market in India. due to inflationary pressures and
He said, “Growth was put as the first challenging macroeconomics. It reads,
vector for any decision-making earlier “Some slowdown was witnessed even
and not cost. Everybody realised that in e-commerce growth in the last two
there has to be an EBITDA outlook quarters, post the mega festive quarter
for every decision. The focus is also of Q2FY23. E-commerce has historically
changing towards the conservation of displayed greater cyclicality, compared
cash. That means a lot of marketing to overall FMCG, driven by spikes in
efforts are getting postponed, and a lot big sale events. However, e-tailing
of events are not happening.” continued to perform better than overall
He also noted that everybody's retail consumption.”
trying to increase their net sales. “They Banerjee also reported that the
are figuring out ways to bring down growth in e-commerce logistics
Return to Origin (RTO) from 10 percent, this year is less attractive than in
for example, to six or seven percent. earlier years. “If earlier years gave an
Everybody is also getting stringent about opportunity to grow revenue by 30 to 40
their customer refunds. Earlier customer percent, it will be limited to around 20
experience used to come before money. percent this year. The growth has halved
Now, it's not the same thing.” for the next 18 months,” he said.
According to market researcher On the same line, Harshal Bhoi, chief
Redseer, Indian e-commerce is business officer of Xpressbees, noted
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