The concept of tech-driven integrated logistics is awakening in India today, and due to structural reforms, the country’s logistics efficiency has improved dramatically in recent years. According to reports, India’s logistics market was around US$250 billion in 2021 and is estimated to grow to US$380 billion by 2025.
Another report by the World Economic Forum analysis indicates that by 2025 the digital transformations in the logistics industry will be valued at US$1.5 trillion. Hence, for any product-based D2C brand, a certain level of investment in logistics is imperative for the company’s growth. Not only big enterprises, but logistics also plays a significant role in managing small-scale businesses’ processes, which eventually become vital for the economy to flourish.
Small scale businesses usually struggle to execute the last mile operations, especially under challenging terrains, where delivery gets delayed, reported Times of India (TOI). They also incur high transportation costs, which double in the case of real-time operating systems (RTOs). Such issues are detrimental to small-scale businesses; however, the emergence of innovative logistic solutions that are majorly tech-based is helping companies overcome such barriers.
How new-age logistics players are helping SMEs accelerate their growth:
1. Data-Driven Insights:
Logistic players provide valuable data and insights to companies that can be utilized for optimal growth. The data-driven insights gathered from previous purchasing patterns of end consumers are beneficial for strategizing sales that small-scale businesses can benefit from. Other crucial intel, such as the market sizes in different locations, the demand & supply ratio, and other statistics, helps enterprises differentiate and change their marketing approaches for better positioning among competitors.
2. Better access to remote regions:
New-age logistics players enable businesses to reach untapped consumer pools located in remote areas or regions that are far away from their establishment. logistics companies can do so with the help of better tracking facilities and an extensive fulfillment network that minimizes the distance from the end consumer and makes it easier to cover new areas, thus, increasing business opportunities.
Warehousing is a challenge for small-scale businesses because it requires high infrastructural costs, and as third-party warehousing in India is dominated by unorganized entities, the cost of renting them is inconsistently high. Other challenges related to warehousing, such as loss of inventory due to poor handling or products running out of stock during peak seasons, lead to heavy monetary loss. Organized private players are harnessing the power of automation and technologies for better warehouse management at significantly reasonable costs that are usually consistent in nature. Smart warehousing provides sellers a range of benefits such as SKU performance intel, better inventory management, and the use of machines in package stocking to avoid human error.
4. Better adaptation to digital transition:
With the growing internet penetration and smartphone usage, consumers are rapidly shifting to online shopping. Consumers have a plethora of sellers to choose from; it has created a competitive open market wherein customer experience is the key to staying relevant. A massive influx of digital-first businesses and D2C players have moved from physical stores to the online marketplace. However, this digital transition has put a strain on logistics in multiple ways. Logistic players are implementing innovative technologies to help sellers meet their requirements. From consumer data collection to auto-courier selection and calculative methods that can help avoid RTO cases. All such issues are identified and mitigated with SaaS-based solutions and tech-driven value-added services.
Logistics is an essential part of any digital-first business in the contemporary era, and for SMEs to thrive in a highly competitive market, efficient logistics is crucial, TOI added. Better logistic operations help enterprises garner new opportunities, keep pace with consumer behavior patterns, streamline SKU management, and various other aspects of a business.
With the upsurge of new technologies and other advancements in India’s logistics industry, enterprises are soaring at an unprecedented speed, contributing to overall economic growth.