EXPRESS DELIVERY INDUSTRY IN INDIA

An Analysis on Future Prospects and Challenges

By: Saras Pokhriyal

A BACKGROUND
The past decade witnessed a sea changes in the way our economy behaves and consumes. The fuel of
liberalization has propelled may new sectors into existence and has provided the impetus that many
others required.
The past decade has seen India transforming into a consumer based economy.

Consumerism as always paved the way for competition and with it the belief that “Consumer is the
KING”.
So, whether it was QSCV, Customer First or the “Customer is the King” the idea was to
keep the end user happy by customizing solutions for him.
Sectors such as Retail, Health and Wellness, Hospitality & Travel, Automobile, FMCG,
BFSI to name a few understood that to have a “share of voice” in the consumers mind
they needed to be as close as possible to the consumer.
Hence there was a need for some one who could bridge this
gap and bring the two closer.
 A need for someone who could reduce the time of
communication and help manufacturers/marketeers be present
at the right place at the right time.
Hence, Logistics and supply chain became an integral part of each and every business
and thus giving rise to the need for specialized players who could take care of the
logistical requirements of the organizations
COURIER INDUSTRY: THE STORY SO FAR
 The Indian domestic courier industry stands at around INR 22 bn. in revenues
and is still at a very nascent stage.
 It is a very disintegrated industry with around 2300 players of which 20 are
major players with national presence 2000 are in the semi-organized sector
and the rest in the unorganized sector.
 The organized sector governs nearly 90% of the overall market.
SALIENT FEATURES

 The industry has exhibited a growth of about 30% over the past
four years and is expected to grow at 25% for the next 2 to 3 years.
 International express cargo holds 6% of the express cargo industry,
but is forecasted to reach 40% by 2017.
EXPRESS DELIVERY INDUSTRY: THE NEXT BIG THING
 Expresses business offer time- definite delivery services
 Valued at around INR 40 bn.

 Of this approximately INR 26 bn was generated by the unorganized

sector.
 Expected to grow at the 20% CAGR over the next 5 years

 The bulk business is dominated by 24 hrs delivery guarantee and next

day delivery.
 The Express Industry Council of India projects the industry to grow at
20% every year.
3PL MARKET: THE CASH REGISTERS
 The 3PL market in India is at a very nascent stage.
 The market is estimated at about USD 890.3 mn

 The growth is driven mainly by the growth in the Retail,

FMCG, BFSI sectors.
 Expected to grow at a CAGR of 21.9% to touch USD 3556.7
mn by 2012.
COURIER INDUSTRY – KEY DRIVERS OF GROWTH

 Economic growth driving demand for logistical solutions.

 Increased Outsourcing – key driver for logistics solutions

 VAT implementations to drive further growth in the industry

COURIER INDUSTRY: CHANGING INDUSTRY DYNAMICS

Services Today Future

Consignment Track & Trace GPS/GIS – dynamic routing of industry
Tracking
Logistics Transportation Movement Solution, manpower, money
and material
Regulatory Compliance Consultative + Compliance
Transportation Trucking Bonded: Express, Trucking
Warehousing Space Provider Dynamic engagement between stock and
fulfillment
Material Pick up & Drop off Procurement & Movement
Movement
THE CHALLENGES
 Dominance of large number of unorganized companies
 Infrastructure changes essential to improve efficiencies.

 National highways constitute only 1.9% of the road network of

the country.
 The average speed of on the Indian roadways is about 35 kmph
which is much below global average.
 Cost of operations
 Put Industry SWOT that we discussed here.
 KEY PLAYERS
Road Air Express Courier Warehousing Trucking 3PL Services
Express Industry Industry Industry
Gati Gati Bluedart Excel Logistics Delhi Assam Excel
Roadway
Safeexpress Safeexpress Firstflight AFL Patel Bax Global
Roadways
TNT (Speedage) Bluedart AFL Om Logistics Sem Corp
TCI DTDC CWC Panalpina
Overnite Safex Geo Logistics
Professional DHL
Courier
BLUE DART
 Blue Dart Express Ltd is the market leader with 36%
market share in the domestic market.
 Blue Dart is the only express