TAM & Market Opportunity
Market Opportunity Overview
India's digital commerce logistics market presents a massive growth opportunity. E-commerce penetration stands at just ~7% of retail (FY25) compared to 32% in China and 19% in USA, indicating substantial headroom. India ships only 3-4 e-commerce parcels per capita annually vs 75-85 in China and 60-70 in USA. The e-commerce market (excluding Q-commerce) is projected to grow at 15-20% CAGR through FY30. Quick commerce is the fastest-growing segment, projected to expand from ₹0.53T (FY25) to ₹4-6T by FY30 at 50-62% CAGR. Shadowfax is uniquely positioned to capture both e-commerce and quick commerce growth.
Key Insights
India e-com: ~7% of retail (FY25).
China: ~32% penetration.
USA: ~19% penetration.
India parcels/capita: 3-4 vs 75-85 (China).
E-commerce Shipments Per Capita (Annual)
| Country | Shipments/Capita | E-com Penetration | E-com Spend (% of Income) |
|---|---|---|---|
| China | 75-85 | ~32% | 8-10% |
| USA | 60-70 | ~19% | 3-5% |
| India | 3-4 | ~7% | 1-2% |
India's low per capita shipments indicate massive untapped growth potential in e-commerce logistics.
Gig Workers in India — Expanding Labor Pool
3.4x growth from ~7M (FY20) to ~24M (FY30)
As per NITI Aayog estimates for non-agricultural workers in top 100 cities, ages 18-45 years, with mobile phones and bank accounts.
India Logistics Market Size
In ₹ trillion (US$ billion), FY 2020, FY 2025
India Logistics Landscape by End User
Notes:
1. Logistics includes the transportation and handling of goods between points of production and consumption, storage, value addition, and allied services.
2. Conversion rate: 1 US$ = ₹85. Source: NCAER, India Economics Survey 2017-18, 2019-20, Redseer research and analysis
$85B → $170B E-commerce GMV (FY25→FY30)
200M → 400M Online shoppers doubling
| Metric | FY22 | FY25 | FY30E | CAGR |
|---|---|---|---|---|
| E-commerce GMV ($B) | 45 | 85 | 170 | +18% |
| Online Shoppers (M) | 150 | 200 | 400 | +13% |
| E-commerce Penetration (%) | 5% | 7% | 12%+ | — |
| E-commerce Shipments (B) | 3.5 | 5.5 | 12.0 | +16% |
| Metric | FY25 | FY30E | CAGR |
|---|---|---|---|
| Market Size (₹T) | 0.53 | 4-6 | 50-62% |
| Shipments (B) | 1.1-1.3 | 4.6-6.7 | 29-44% |
| Segment | FY25 Shipments (B) | FY30 Shipments (B) | CAGR |
|---|---|---|---|
| Food & Other Hyperlocal | 2.0-2.2 | 3.4-4.0 | 11-13% |
| Quick Commerce | 1.1-1.3 | 4.6-6.7 | 29-44% |
Shadowfax Hyperlocal Clients
Quick Commerce
Zepto, Blinkit, BigBasket, Flipkart Minutes, Swiggy Instamart
Food Delivery
Zomato, Swiggy, ONDC Network
On-Demand & Others
Apollo Pharmacy, Magicpin, Licious, Pincode, Uber (Mobility)
Overview of B2C online logistics sub-sectors across E-commerce and On-Demand Hyperlocal segments, including definitions, categories, delivery timelines, shipment volumes, and 3PL outsourcing rates.
| Sub-sectors | E-commerce | On-Demand Hyperlocal | ||
|---|---|---|---|---|
| Horizontals | Non-Horizontals | Quick Commerce | Food & Others | |
| Definition | Horizontal marketplaces offer a broad spectrum of product categories, providing consumers with a one-stop platform to shop | Non-horizontal marketplaces focus on niche categories, including vertical marketplaces dedicated to a specific sector (e.g., fashion, electronics), D2C brands, and others | Quick commerce platforms deliver fast-moving consumer goods and retail essentials to consumers within ultra-short delivery windows, typically under 30 minutes | This category primarily focuses on hyperlocal delivery services for food, meat, gifting solutions, and consumer-to-consumer (C2C) transfers |
| Categories | Wide selection — electronics, fashion, BPC¹, furniture, home and décor, general merchandise² etc | Focused product ranges like electronics, BPC¹, fashion, groceries, or niche categories (e.g., luxury items) | As of FY24, majorly groceries. Upcoming categories are BPC¹, Electronics, Home, Fashion | Food, Meat, Gifting, Consumer to consumer transfers |
| Delivery Timeline | Same-day to longer delivery timelines | <30 Mins | 30 Mins - 2 Hr | |
| Total Shipments (FY25) | 4-4.3 Bn | 0.9-1 Bn | 1.1-1.3 Bn | 2-2.2 Bn |
| 3PL Outsourcing (FY25) | 33-34% | ~74% | ~15% | ~13% |
Notes:
1. BPC stands for Beauty & Personal Care
2. General Merchandise includes Books & Media, Auto Accessories, Toys, Sports & Fitness, Household Supplies etc.
3. E-commerce shipments include Delivered plus RTO (single parcel count for forward and return legs) plus Reverse Pick-Up shipments across eCommerce, D2C, Formalized social commerce, omnichannel by traditional brands.
The e-commerce logistics value chain is divided into three primary sections, with last-mile being the most complex and cost-intensive stage requiring precise coordination and robust technology systems.
Why Last Mile is Most Complex
Shipment Classification by Last Mile Status
A forward shipment that is accepted by the customer.
A shipment that has not been delivered and returned to its origin.
A shipment picked up from the customer for return after delivery.
As of FY 2025, e-commerce logistics handled 4.9-5.3 billion shipments, growing at a stronger pace than e-commerce retail — mirroring trends observed in China.
E-commerce Shipments Growth
In billion, FY 2020-2025, FY 2030P
Per Capita Shipments
In #, FY 2025
Note: E-commerce shipments includes Delivered plus RTO (single parcel count for forward and return legs) plus Reverse Pick-Up shipments across eCommerce, D2C, Formalized social commerce, omnichannel by traditional brands.
Growth in lower AOV categories like fashion is contributing to a faster pace of shipment growth. The e-commerce retail market is observing an uptick in number of shipments with approximately 4-6% CAGR decline in average shipment value from FY 2020 to FY 2025.
Shipments by Category
In billion, FY 2020, FY 2025
Category Mix (FY 2025)
Notes:
1. Includes average shipment value of Delivered plus RTO plus Reverse Pick-Up shipments across eCommerce, D2C, Formalized social commerce, omnichannel by traditional brands. Excludes hyperlocal shipments.
2. "Others" category includes home & furniture, books and general merchandise, babycare, etc.
3PL players cater to 40-42% of logistics demand in FY 2025, with heavy reliance from faster-growing non-horizontal categories. 3PL providers deliver end-to-end logistics solutions and assist captive logistics by managing specific segments such as first-mile, mid-mile, or last-mile.
3PL Outsourcing by Segment (FY 2025)
Shipments by Business Model
Why Platforms Rely on 3PL Partners
Supply Chain Unbundling Trend
Value-Added Services Driving 3PL Growth
Hyperlocal market refers to the rapid and localized delivery of goods and services within a specific geographic area, often within hours or even minutes. It enables quick commerce for fast-moving consumer goods, groceries, electronics, and fashion, as well as hyperlocal services such as food delivery, gifting solutions, and consumer-to-consumer (C2C) transfers.
Hyperlocal Delivery Segments
While consumers increasingly shifted online wanting a wider range of options and improved access, the delivery timelines for existing e-commerce models spanned from a day to multiple days. With increasing purchasing power and time-constrained lifestyles of urban consumers, the demand for reduced delivery times, fresher products, and more 'last-minute' purchases has grown.
Quick Commerce Market Size
In ₹ trillion, FY 2022-FY 2030P
Why Quick Commerce Works in India
Hyperlocal Shipments by Segment
In billion, FY 2025 vs FY 2030P
Segment Growth Rates
| Segment | FY25 | FY30P | CAGR |
|---|---|---|---|
| Quick Commerce | 1.1-1.3B | 4.6-6.7B | 29-44% |
| Food & Others | 2.0-2.2B | 3.4-4.0B | 11-13% |
| Total Hyperlocal | 3.1-3.5B | 8.0-10.7B | ~20% |
3PL Outsourcing (FY 2025)
Shadowfax Hyperlocal Partners
Quick Commerce
Zepto, Blinkit, BigBasket, Flipkart Minutes, Swiggy Instamart
Food Delivery
Zomato, Swiggy, ONDC Network
On-Demand & Others
Apollo Pharmacy, Magicpin, Licious, Pincode, Uber (Mobility)