Growth in e-commerce a boon for India’s logistics sector

7 June, 2021 12:00 AM printer

NEW DELHI: Logistics provider Blowhorn has managed to double its business to achieve 2 million deliveries a month, servicing more than 70 cities in India amid a surge in online purchases since the pandemic hit last year and as the logistics sector continues its own process of going digital.

The technology-driven, Bangalore-based company connects customers to warehousing space and trucks for deliveries within cities via its website and mobile app, report agencies.

Mithun Srivatsa, who co-founded Blowhorn in 2014, describes his company as “an Uber for trucking or moving goods” and “an Airbnb for warehousing”, as it owns neither the trucks or warehouses available through its network. The company has received investment from the Michael and Susan Dell Foundation and India’s Venture Catalysts, among others

“E-commerce adoption took off during the pandemic and has spurred more and more people online,” says Mr Srivatsa, who is the company’s chief executive. “Suddenly you had people like my mother, who was 65, deciding to buy their groceries online.”

India’s logistics sector was worth $320 billion in 2019 and accounts for 11 per cent of the country’s GDP, according to a report by consultancy Redseer.

“Logistics have remained a backbone for many industries and over the years has enhanced its technology-based offerings to suit various sectors and their needs,” the consultancy says.

Its data shows that e-commerce transportation grew 70 per cent year-on-year to 2.55 billion shipments in 2020, and it projects that this will increase to about 10.5bn by 2025.

“The industry overall right now is very bullish,” says Anjani Mandal, the chief executive at Fortigo Network Logistics, a trucking platform based in India’s tech hub, Bangalore. “The e-tailers have had a rapid growth because of the lockdown.”

In March last year, India introduced one of the world’s strictest nationwide lockdowns in response to the pandemic, which meant that people could only go out for essential goods or services. For the first month of the lockdown, Mr Srivatsa at Blowhorn explains that the company did “a small fraction of volumes we were doing before” because of the “chaos” and “mass confusion” that the restrictions caused.

But as people moved towards online orders, the service started to see a surge in demand from its e-commerce clients and did “some of our best growth months during the pandemic”. With this boost, the company is expecting to achieve profitability this year. The logistics market is made up of of road transport, warehousing and other delivery networks such as air, sea and railways.

Road logistics, at a value of $240bn in 2019, makes up the lion’s share at 75 per cent of the market, according to RedSeer. It says that “the road logistics market and last mile delivery is moving in the right direction to profitability”.

The last mile delivery segment, which is the area Blowhorn focuses on, is expected to expand to become a $6bn to $7bn market by 2024, up from $800m to $900m in 2019, Redseer estimates.


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