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Food delivery shipments hit 160 mn in Q3

Food deliveries by platforms such as Swiggy and Zomato grew 50%, while deliveries by marketplaces such as Flipkart and Amazon grew 63% in the quarter.mintPremium
Food deliveries by platforms such as Swiggy and Zomato grew 50%, while deliveries by marketplaces such as Flipkart and Amazon grew 63% in the quarter.mint

  • Overall shipments by large e-commerce firms, excluding online pharmacy and grocery, grew to 750 mn in the October-December quarter
  • The growth of third-party logistics can also be attributed to the partnerships with traditional and digital brands that directly sell their products online

Shipments by food delivery platforms grew to 160 million in the October-December quarter from 107 million in the preceding quarter amid a surge in orders, increasing staff and improving efficiencies, according to a report by management consultancy RedSeer and online logistics firm Shadowfax.

Food deliveries by platforms such as Swiggy and Zomato are growing at 50% compound annual growth rate (CAGR), while deliveries by marketplaces such as Flipkart and Amazon are growing at 63% CAGR —the highest among all e-commerce segments.

Overall shipments by large e-commerce firms, excluding online pharmacy and grocery, grew to 750 million in the October-December quarter, driven by festive sales and discounts, as compared with 460 million in the quarter before, according to the report.

The report noted that the role of third-party logistics partners is becoming crucial for marketplaces.

During the last quarter, shipments from third-party logistics players grew to 345 million, a 70% jump from 198 million in the July-September quarter.

This was also driven by e-commerce players partnering with third-party logistics firms to create a wider presence and provide superior deliveries in tier-II towns, and beyond, during festive sales.

The growth of third-party logistics can also be attributed to the partnerships with traditional and digital brands that are beginning to directly sell their products online.

“Logistics has been one of the key pillars for the success of e-commerce in India. The report clearly shows that third party logistics players are able to provide a similar and, in some cases, even better delivery experience than traditional captive players," said Anil Kumar, founder, and chief executive officer of RedSeer Consulting.

RedSeer said the growth of logistics aggregators is also fuelling third-party logistics shipments in the country.

However, the role of third-party logistics continues to be limited to horizontal commerce.

For foodtech and online grocery, more than 90% of shipments are being delivered by a player’s in-house captive delivery fleet.

“E-commerce will evolve into maximum two-day deliveries. While discounts on products are no longer a key driver for consumers to shop online, speed of delivery, safety and hygiene have become imperative in the past couple of months. Third-party logistics will emerge as an important driver for bringing consumer delight to the brands offering safer as well as faster deliveries," said Abhishek Bansal, chief executive and founder, Shadowfax.

Redseer and Shadowfax on Wednesday also released the ‘Delivery Delight Index’, developed after 9,000 consumer surveys covering 34 players across four types of e-commerce platform across marketplaces, hyperlocal, digitally native brands and traditional brands.

These 34 brands contribute to almost 90% of gross merchandise value (GMV) clocked by the Indian e-commerce sector, and were tested on parameters like speed of delivery and delivery experience.

Online pharmacy PharmEasy emerged a winner among horizontal e-commerce players including Amazon, Flipkart, Myntra, Nykaa, rating high on parameters such as speed of delivery, packaging and delivery executive experience.

Pharmeasy also rated high in terms of net promoter score (NPS), toppling Amazon India.

In the hyperlocal category, Dunzo, Amazon Pantry and Swiggy dominated on various parameters. Amazon Pantry, Amazon’s hyperlocal grocery service, rated high in terms of NPS.

As brands took on online channels during covid, Decathlon and ITC Ltd. provided superior delivery service online, according to the Delivery Delight Index.

Hyperlocal and horizontal commerce account for 87% of total deliveries in the online retail market. According to Redseer, GMV of online logistics shipments in India is expected to grow to $42 billion by the end of FY21 and to $180 billion by FY25.

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