Monday – Friday 10.00a.m. – 19.00p.m.
info@gidmarket.in
All reports

Forecast of the courier delivery market in India

Forecast of the courier delivery market in India Forecast of the courier delivery market in India
Release date 12.09.2022
Number of pages 39
Formats DOCX, PDF
Cost 60000 ₹

The relevance of research

Courier delivery is the organization of transportation of goods and postal items by courier service directly from the client to the consignee on the principle of "from hand to hand" or
"from door to door".. An increasing number of people are purchasing various goods via the Internet. Most online retailers partner with third-party courier services to ensure seamless delivery in certain regions


Purpose of the study

Analysis of the state of the courier delivery market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the courier delivery market


Content 

Chapter 1. Key Components of the Courier Delivery Market

1.1. Market size

1.2. Growth rates of the courier delivery market 

1.3. Courier delivery market trends          

1.4. The main problems of the industry

1.5. Stage of the life cycle of the courier delivery market

1.6. Estimation of the number of buyers and their financial capabilities

1.7. Estimated consumption per capita

1.8. Analysis of sectoral indicators of financial and economic activity

1.9. Price analysis

Chapter 2

2.1. Economic components

2.2. Social Components

2.3. Technological components

2.4. Political Components

2.5. STEP-analysis of the courier delivery market

Chapter 3. Assessment of the degree of competition

3.1. Scale of competition (local, regional, national, global)

3.2. Number of competitors and relative market shares of the largest competitors

3.3. Compact location of industry companies in certain regions

Chapter 4 Industry Forecasts

4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)

4.2. Analysis of the impact on the state aid industry at the current date

4.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers existing in the courier delivery market

4.4. Prospects and growth drivers for the courier delivery market

4.5. Forecast for the development of the courier delivery market in the context of the current economic crisis

Chapter 5 Forecasting Methodology

5.1. Methods for forecasting key industry indicators

5.2. Sources of information for forecasting

5.3. Timing of forecasting


Research excerpt 

Chapter 1. Key Components of the Courier Delivery Market

1.1. Market size         

Courier delivery is the organization of transportation of goods and postal items by courier service directly from the client to the consignee on the principle of "from hand to hand" or
"from door to door".

An increasing number of people are purchasing various goods via the Internet. Most online retailers partner with third-party courier services to ensure seamless delivery in certain regions.

A significant factor in the rapid growth in demand for courier services was the coronavirus pandemic and related restrictions. Many people had to stay at home for a long time and courier deliveries became necessary for them, just to buy at least food.

Despite the fact that most of the restrictions have already been lifted, a significant part of the service users attracted due to the pandemic remained, as people simply got used to deliveries and began to use them on a regular basis to save their time. Thus, the demand for services remains high. 

A courier delivery business is quite easy to open and does not require large expenses, which makes it affordable for almost any entrepreneur. However, this creates the problem of high levels of competition, which can adversely affect profitability even with increased demand from customers.

...

Diagram 1. The structure of logistics without taking into account consumer goods, 2021,%

1.2. Growth rates of the courier delivery market 

Market growth rates in the period 2017-2021 allow us to state the active development of courier delivery. Many factors influenced the development of the market: an increase in the number of documents and goods, as well as the speed of their turnover, the marketing activity of players, etc.

...

Diagram 2. Dynamics of the volume of the courier delivery market, 2017–2021, billion Rs.

1.3. Courier delivery market trends

Let's highlight the main trends that affect the courier delivery market:

  • Turning online orders into everyday practice;
  • The explosive growth of the food segment and its shift towards small impulse purchases with super fast delivery;
  • Growing customer requirements for delivery times;
  • Development of infrastructure for channels and speed of delivery; 
  • Development of IT to expand services; 
  • Impact of the pandemic: growth in the share of prepaid orders; contactless delivery has appeared and continues to develop; 
  • Growth in demand for courier delivery and the load on couriers, while the number of people involved in the profession does not increase; 
  • Logisticians try to make the profession more attractive and convenient;
  • Points of issue of orders and parcel lockers remain the main delivery channel for the buyer; 

The letter post and invoice market is undergoing a transformation from paper to electronic format. The legally relevant electronic communications market continues to grow, and the regulatory framework governing legally relevant communications processes is being updated.

1.4. The main problems of the industry       

Despite the positive trends in the development of the delivery market, the industry has many problems that market players have to face: a huge territory with difficult geographical conditions and poorly developed transport infrastructure, difficulties in finalizing industry standards, rules, and requirements, including customs legislation.

According to industry experts, Indian logistics lacks a clear legal framework, trust and understanding on the part of customers, and technical support in terms of communication and information systems.

Among the main problems of the industry can also be identified:

...

1.5. Stage of the life cycle of the courier delivery market

From a life cycle perspective, the courier delivery market is in a growth phase. This is evidenced by:

  • growth in consumption in monetary terms per capita;
  • growth of market volume in monetary terms;
  • The growth potential of the market remains quite high.

The growth stage is very important for companies, as it creates the most favorable conditions for dominating the market and for increasing profitability and stability. 

All efforts at this stage should be aimed at extending it, creating entry barriers for new players, at achieving maximum market coverage - all this will ensure the most comfortable existence of companies at the next stage of the life cycle.

Pricing is becoming one of the ways to compete. As a result of increased competition, cheaper analogue products or more affordable variations of services appear - all this leads to lower prices, to large discounts and price promotions.

...

1.6. Estimation of the number of buyers and their financial capabilities         

Courier services are used by both individuals and various firms, so the business in question can have extremely wide coverage.

...

Individual entrepreneurs (IP) and legal entities are potential clients of courier delivery services. Their reduction negatively affects demand. 

...

1.7. Estimated consumption per capita

Estimation of per capita consumption was made by GidMarket analysts based on the ratio of the courier delivery market to the population of India. 

The growth in per capita consumption of services is primarily due to the growing popularity of the service. In addition, the increase in the indicator was influenced by the rise in prices for services. The dynamics of the indicator testify to the prospects of the considered market segment.

The most important shipping characteristics for buyers are speed and cost.

1.8. Analysis of sectoral indicators of financial and economic activity

Financial and economic indicators in the field of courier delivery are presented by GidMarket analysts according to Rosstat, taking into account OKVED 2: (53.20) Other postal and courier activities. 

The gross margin shows how much gross profit falls on a unit of revenue. It serves as an assessment of the economic efficiency of the enterprise, which reflects the rational use of labor, material, monetary and other resources.

...

Current liquidity characterizes the extent to which all short-term liabilities of the enterprise are secured by current assets. Shows how many rupees of current assets account for a unit of short-term liabilities. 

The estimated indicator of current liquidity of a normally operating solvent legal entity must be at least one, that is, it is necessary that the total value of current assets be greater than the amount of short-term liabilities.  

...

A more stringent liquidity criterion is the absolute liquidity ratio. It shows what part of short-term liabilities can be repaid immediately, if necessary, at the expense of available cash and marketable securities.

...

1.9. Price analysis    

The calculation of the consumer price index in the courier delivery market was based on price indices for sending a simple parcel inside India weighing 1-2 kg and sending a simple letter inside India weighing up to 20 g. 

Table 4. Consumer price indices in the courier delivery market in India in 2017–Jun. 2022, %

The cost of courier delivery mainly consists of two components: distance and weight of the parcel. 

At the same time, courier services offer special conditions for cooperation. These are surcharges or discounts for sending an order, including an additional fee for the clearance of Goods by service operators, and penalties for canceling delivery or waiting for a client at an address. Additionally, a fee may be charged for storage in the warehouses of the courier service. Discounts are provided for a large number of parcels.

...

Chapter 2 

2.1. Economic components         

India GDP

GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation. The dynamics of India's GDP are decisive in the vector of development of the entire economy of the country and determine the key trends in consumer effective demand and economic activity.

...

2.2. Social Components 

Improving working conditions

In conditions of an acute shortage of personnel, the task is not only to find high-quality performers, but also to keep them. This also applies to temporary workers. 

They try to keep people in various ways. First of all, good attitude. This is how kindly they met the new employee, how politely they talked to him, whether they spent time to bring him up to date, competently explain his work tasks. At first glance, these things seem elementary and even banal, but in fact, this is a big problem.

...

2.3. Technological components      

Growth in e-commerce

...

Industry modernization 

The requirements for solutions for automating logistics processes are changing - now they must have sufficient functionality, and a high level of reliability, show results that are understandable to the business and fit into the existing IT infrastructure, as well as meet global automation trends.

...

Competition from substitute services

Electronic document management. A gradual transition to the digitalization of documents began in 2002, with the advent of the first law "On Electronic Digital Signature" No. 1-FZ. Now reporting for many business states is submitted only in electronic form.

From 1 Sep. 2022, employees and employers will have the opportunity to exchange documents through the State Services portal. The service will provide technical capabilities for the implementation of personnel electronic document management.

Among the main advantages of electronic document management are: 

  • the flexibility of the system, which allows you to quickly sort and find the desired document;
  • savings on paper, consumables, postage, archival premises and other costs closely related to paper workflow and archives;
  • communication with staff becomes operational. This is the ability to sign documents at any time, from any device (smartphone, laptop, tablet), from anywhere in the world.

We also note that it is possible to transfer documents through a notary. 

...

2.4. Political Components            

Lack of a regulatory framework governing the industry

Although courier delivery services have been provided in India for many years, there is no clear legal framework in this area. Most of the documents on which the regulations of this type of activity are based are of a general nature, and the issues of courier delivery are mentioned in them indirectly. These documents include the Civil and Customs Codes and the rules for cargo transportation developed by the Ministry of Transport. The negative influence of the factor.

World politics and anti-Indian sanctions

The imposed sanctions have seriously affected exports and imports in India. On February 24, 2022, international companies and Western countries began imposing economic and political sanctions against India. For this reason, well-known international organizations have suspended their work in India. This also applies to logistics. Despite the difficulties, it is possible to deliver parcels and documents from India to the EU countries and vice versa.

More about the impact of political tensions in paragraph 4.3.

2.5. STEP-analysis of the courier delivery market

According to the results of the performed STEP-analysis, macro-environment factors have a negative impact on the development of the courier delivery market to a greater extent. 

Among the most negative factors are: competition from substitute services, a decline in the number and income of the population, political tension, and the lack of a regulatory framework.

Table 7. STEP analysis of factors influencing the courier delivery market

Chapter 3. Assessment of the degree of competition              

3.1. Scale of competition (local, regional, national, global)             

The courier delivery market is highly competitive on all scales: local, regional, national and global. 

As part of local and regional competition, zones are strictly limited to ensure the fastest possible delivery. Among the competitors here are new technology companies ...

...

The services of transnational corporations are mainly used by foreign companies or their representative offices. Moreover, many contracts are concluded at the head offices of corporations around the world. When choosing a carrier, foreign customers pay attention to the brand, its fame and reputation.

Indian carriers mainly provide their services to Indian businesses and state-owned companies. However, all market participants compete for customers, as well as for improvement in logistics and customer service.

3.2. Number of competitors and relative market shares of the largest competitors 

Since the early 2000s The courier service market has undergone active development, and today there is a wide choice of companies with an extensive price range and a list of services. The rating is based on the volume of revenue for 2021 of the most popular services in India, leading companies operating in the field of courier delivery.

...

The study of the dynamics of total revenue is indicative from the point of view of the analysis of growth trends.

Diagram 12. Dynamics of the total revenue of the largest operators of the courier delivery market (TOP-5) in India, 2017–2021, billion Rs.

3.3. Compact location of industry companies in certain regions

...

Diagram 13. The compactness of location of companies in the industry in certain regions, Aug. 2022, %

Chapter 4 Industry Forecasts       

4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014) 

accompanied by the destruction of the usual economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy, repeating with a certain frequency, and depending on the scale, it can either concern a particular state or be of global importance. 

The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a fall in the gross national product, a large-scale increase in unemployment, and often a depreciation of the national currency.

...

4.2. Analysis of the impact on the state aid industry at the current date 

Since the introduction of restrictive measures in India related to the spread of new coronavirus infection, the state has been providing the necessary support measures to business representatives who have encountered objective difficulties. Some of them are systemic and apply to all organizations and individual entrepreneurs, while others are intended only for companies and businessmen working in certain sectors of the economy.

Let's present in the table the current support measures that can be used in the industry under study.

...

4.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers existing in the courier delivery market

The negative impact within the courier delivery market is noted in the segment of international parcels. 

Difficulties in the industry began long before the imposition of sanctions and political tensions - the logistical crisis formed into the coronavirus pandemic, when supply chains were disrupted, and transportation tariffs began to skyrocket.

In view of the special military operation and the coronavirus pandemic, a number of restrictions on postal exchange between states were introduced.

...

Thus, a special military operation on the territory of Ukraine and a pandemic that has not disappeared anywhere have had a tremendous impact on the international delivery market. The exchange of parcels between states has changed its habitual state.

Among the main barriers that currently exist in the market:

...

4.4. Prospects and growth drivers for the courier delivery market

Perspectives:

...

The main growth drivers will be:

...

4.5. Forecast for the development of the courier delivery market in the context of the current economic crisis 

The external environment for the Indian economy remains challenging and significantly limits economic activity. 

The main feature of the current economic situation is that supply is shrinking more than demand. This is what creates the main inflationary pressure. The colossal uncertainty of the situation is expressed in an increased amount of risks for the forecast. 

Nevertheless, the forecast indicators of the development of the Indian economy, barriers and growth drivers that exist in the market allow forecasting the dynamics of the courier delivery market volume.

...

Chapter 5 Forecasting Methodology          

5.1. Methods for forecasting key industry indicators   

Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and forecasted general economic situation…

In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.

5.2. Sources of information for forecasting    

  • Industry volume over the past 5 years
  • Industry dynamics in 2008-2009, in 2014-2015, in 2017-2021
  • Dynamics of macroeconomic indicators over the past 9-10 years
  • Current public assistance plans
  • Databases of the State Statistics Committee of India
  • Indian Revenue Service databases
  • Open sources (websites, portals)
  • Issuer reporting 
  • Company websites
  • Media Archives
  • Regional and federal media
  • Insider sources
  • Specialized analytical portals

5.3. Timing of forecasting

The forecast belongs to the medium-term category - 5 years (2022-2026)


Diagrams

Diagram 1. The structure of logistics without taking into account consumer goods, 2021,%

Diagram 2. Dynamics of the volume of the courier delivery market, 2017–2021, billion Rs.

Diagram 3. Stage of the life cycle of the courier delivery market

Diagram 4. Dynamics of real incomes of the population of India, 2013–Jun. 2022, %

Diagram 5. Population dynamics in India, as of 01 Jan. 2013–2022, million people

Chart 6. Consumption in the courier delivery market per capita, 2017–2021, Rs./person

Chart 7. Profitability before tax (profit of the reporting period) in the courier industry in comparison with all sectors of the Indian economy, 2017-1 quarter. 2022, %

Chart 8. Current liquidity (total coverage) for the courier delivery industry in 2017–1Q 2022, times

Chart 9. Dynamics of India's GDP, 2013–Jun. 2022, % to the previous year

Chart 10. Monthly dynamics of the US dollar against the rupee, 2017-Aug. 2022, Rs. for 1 US dollar

Diagram 11. Shares of the largest competitors in the courier delivery market in 2021, %

Diagram 12. Dynamics of the total revenue of the largest operators of the courier delivery market (TOP-5) in India, 2017–2021, billion Rs.

Diagram 13. The compactness of location of companies in the industry in certain regions, Aug. 2022, %

Diagram 14. Forecast of the courier delivery market in 2022–2026, billion Rs.


Tables

Table 1. Number of legal entities and individual entrepreneurs in India units, 2018–Apr. 2022

Table 2. Courier Delivery Industry Gross Margin vs. All Industries in India, 2017-Q1 2022, %

Table 3. Absolute liquidity of the courier industry compared to all sectors of the Indian economy, 2017-Q1 2022, times

Table 4. Consumer price indices in the courier delivery market in India in 2017–Jun. 2022, %

Table 5. Average prices on the courier delivery market in the Union Territories, Rs./service

Table 6. Expert forecasts for the decline in real GDP in India in 2022, %

Table 7. STEP analysis of factors influencing the courier delivery market

Table 8. Main companies participating in the courier delivery market in 2021

Table 9. Assessment of the impact of recent crises on the industry

Table 10. Analysis of the impact of the state assistance proposed as of August 17.08.2022, in connection with the spread of coronavirus infection

Table 11. Analysis of the impact of the state aid proposed as of August 17.08.2022, under sanctions

Table 12. Forecast indicators of the development of the Indian economy

 

 


All reports