Huge Growth In Ecommerce To Benefit Logistics Companies Including India Post

A paradigm shift in doing business creates its own losers and winners. Rise in ecommerce business is helping India Post to re-discover itself in a new avatar. According to national estimate, in the recent times the department of posts delivered more than two lakh ecommerce parcels everyday which is double than what it has been doing a year back. The ecommerce revenue for India Post is estimated to be around Rs 400-500 crore for the year ending March 2015. The same segment posted revenue of Rs 200 crore two years ago. Revenues are likely to rise from this segment.

According to media reports, Ashok Kumar Dash chief postmaster general (Maharashtra Circle), India Post said "Ecommerce fulfillment (shipping) is a big business opportunity for us. Associations with ecommerce portals are likely to go up in the coming days, and the quality of delivery in farflung areas will be crucial."

This is a new-age business which is going to be a key revenue driver after analysing the phenomenal rise in daily mailing volumes as it is increasingly looking at associations with entities such as Amazon, Flipkart, Snapdeal and YEP myntra , a move aimed at increasing revenue generation for the 200-year old straggler.

Flipkart started shipments to its customers using the postal services. As per the analysis in the Mumbai reason, around 700-800 parcels are being delivered everyday since past three four months. Amazon parcel delivers around 7000 a day, more than 200 shipments compared to November last year.

According to a recent report by PwC, the ecommerce sector in India has grown by 34 per cent ( CAGR) since 2009, touched Rs 10500 crore in 2014. It is expecting to be about Rs 14000 crore in 2015. This directly shows it will be higher growth in logistic business in upcoming years. It is estimated that all-India revenue from ecommerce is expected to be Rs 900-1,000 crore in FY16 for India Post.
The presence of courier companies is limited in tier-II and tier-III cities and this is the area exactly where the India post is hoping to cater to the growing needs in this sector. The logistic business in India is also estimated be at Rs 64000 crore. The postal departments has increased its network and over 1.5 lakh branches.

The ecommerce companies valuation bar is rising with every round of funding, not surprising given the sector’s potential. According to Gurgaon-based consultancy Techopark Rs 13,800 crore Indian e-tailing will reach to Rs 1.92 lakh crore by 2020 and account for three per cent of the country’s retail market.This means more investments into the fledgling e-commerce businesses. And due to rise in ecomerce business the logistic sector will also grow accordingly.