Jul 30, 2024 08:46 PM IST
Indian e-commerce sector thrives on efficient logistics, driven by government initiatives & tech investments, creating millions of jobs & boosting economy.
We are living in the age of digital commerce, and Indian customers are demanding a greater selection of products at low costs and speedy delivery. This is possible only when a robust supply chain supports digital commerce. Interestingly, while e-commerce is only about 10-11 years old in India, it has been able to solve this puzzle, largely due to the efforts of the government and private players who have leveraged existing ecosystems and built the latest technologies. According to the latest Economic Survey, this concerted effort has resulted in India ranking 22nd in international shipments. No wonder a large logistics infrastructure supporting the growing online commerce sector in India is a big livelihood generator, even for communities that were traditionally underserved. The government sees this sector as a contributor to economic growth, a belief that resonated in the recent budget through Logistics Ease Across Different States (LEADS) and the Jan Vishwas Bill 2.0. A vibrant e-commerce sector, including its logistics side, is vital to realising the goal of Viksit Bharat by 2047, given the millions of jobs it creates.
India’s e-commerce sector has been spurred on by a confluence of factors, including government initiatives, reduced smartphone and data plan prices, and a significant shift in consumer behaviour. This growth is not just limited to major urban centres but is also organically expanding to tier II cities and smaller towns. This has generated an insatiable demand for efficient logistics services. Timely and effective delivery has become critical to customer satisfaction, prompting logistics companies to invest in advanced technologies and infrastructure. Automated warehouses, distribution centres, and innovative delivery models have emerged to address the evolving needs of the e-commerce supply chain.
The logistics industry in India, largely driven by e-commerce, is now a major contributor to the economy, accounting for approximately 14% of the country’s GDP and employing over 22 million people. However, the Indian economy needs to generate an average of nearly 7.85 million jobs annually till 2030 in the non-farm sector to cater to the rising workforce, according to the Economic Survey. The good news is that the Indian logistics market, set to reach $484.43 billion by 2029, has the potential to generate these jobs. The role of e-commerce platforms will assume a critical proportion as the gig workforce is expected to expand to 6.7% of the non-agricultural workforce or 4.1% of the total livelihood in India. E-commerce is poised to generate approximately 10 million jobs by 2027 in various roles including transportation, warehousing, and value-added services like packaging and inventory management.
We are also seeing the phenomenal rise of direct-to-consumer brands, and this is further driving logistics companies to expand their networks to serve these new markets. Hence, the logistics sector, particularly the last-mile delivery segment, can become a significant employment generator, with the current gig workforce of 7.7 million in India expected to triple to 23.5 million by 2030. This growth will largely be driven by the rising demand for delivery personnel in the e-commerce and quick commerce sectors. Notably, 80% of flexi workers in India are in the 21-30 age group, with an average salary of ₹20,000-22,000 a month.
This e-commerce-driven growth in logistics is not without its challenges. The sector faces high operational costs, complex last-mile delivery in diverse geographies, as well as high attrition rates. However, these present opportunities for innovation. Companies are leveraging technology to streamline operations, improve workforce management, and enhance customer experience. The focus is on creating more fulfilling career paths within the logistics sector, potentially reducing the stigma associated with certain roles.
As e-commerce continues to grow, the logistics sector is poised for further evolution. The demand for seamless, efficient logistics setups will continue, driving investments in technology and infrastructure. To make the job more effective, we can expect more automation in warehouses, increased use of data analytics for demand forecasting and route optimisation, and a greater emphasis on sustainable logistics practices, such as electric delivery vehicles and solar-powered warehouses. This evolution underscores the symbiotic relationship between e-commerce and logistics, highlighting the need for continual adaptation and innovation. As India aims to become a $5-trillion economy by 2030, the logistics sector, powered by e-commerce, will undoubtedly play a crucial role in achieving this ambitious target, driving both employment and economic growth.
Abhinav Singh is vice president (operations), Amazon India. The views expressed are personal
Story Saved
