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It wouldn’t be wrong if you called this the summer in which India’s logistics giants began warming up to direct-to-customer (D2C) companies. It was a signal—the country’s purchasing habits were changing and Delhivery, India’s largest largest TechCrunch Indian logistics giant Delhivery raises $277 million ahead of IPO Read more  third-party (3PL) company, was at the centre of it all. 

In June, the company announced that it would offer same-day delivery in 15 cities. And it wasn’t the only one. 

A week after the announcement, rival Xpressbees announced same-day delivery in 51 cities and next-day delivery in over 1,000 tier-2 cities and towns. Meanwhile, logistics aggregator-in-chief, Shiprocket, acquired an 80% stake in Pickrr. The Delhi-based logistics company is focussed on the D2C and small and medium enterprise (SME) segments. This came after four other niche acquisitions earlier in the year.

The sudden rise in interest is not unfounded. The post-pandemic adoption of digital commerce has led to a significant shift in consumer preferences. “Brands have benefitted from strategies such as creative marketing on Instagram or Twitter, and customers are increasingly looking beyond e-commerce platforms for their purchases,” said a senior Delhivery executive. This executive and the others The Ken spoke to for the story requested anonymity as they’re not authorised to speak to the media. 

Pickrr’s chief executive officer (CEO) Gaurav Mangla, noted noted Inc42 We Are Eyeing $120 Mn In ARR by 2023, Pickrr Founder On Acquisition By Shiprocket & More Read more at the time of the acquisition that, D2C brands comprised just 5% of the overall e-commerce volumes in 2018. Horizontal platforms such as Amazon and Flipkart made up the rest. This number has now gone up to 20% and is likely to be 43% by 2026, he added.

India’s D2C market, pegged at about Rs 1,200 crore ($150 million) in the year ended March 2022, is also expected to grow. According to consulting firm Praxis Global Alliance, it could grow at a compounded annual growth rate of 40% to hit Rs 6,000 crore ($748 million) in five years.

Capturing this cohort was crucial for the eleven-year-old Delhivery maintaining its numero uno position in Indian logistics. The company went public in May, raising over Rs 5,000 crore ($625 million) at a valuation of US$ 4.5 billion. This was after a stellar year ended March 2022. Revenues doubled to Rs 7,240 crore ($903 million) as did express parcel shipments—at 582 million—giving it a quarter of the overall e-commerce parcel delivery market share.

Brands also are keen on faster deliveries.

AUTHOR

Aayush Agarwal

Aayush covers businesses that are primarily Internet for The Ken. In his previous stint at Goldman Sachs, he spent slightly more than a year analysing investment opportunities in the China Internet space. A science graduate, he completed his postgraduate from the Indian Institute of Management, Kozhikode. Write to him if, among other things, you wish to talk about e-businesses, journalism or just offbeat career choices.

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