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Global E-commerce Logistics Market No More a Playground of Behemoths as New Entrants Up the Ante, Finds TMR
The e-commerce logistics space thus is extremely attractive currently and will witness the rise of many new companies, TMR says. While large companies are investing in drones and last-mile connectivity to keep ahead of the others, the smaller firms are focusing on value-added differentiating services such as route optimization and innovative parcel tracking. These trends will make the e-commerce logistics market a space bubbling with innovation, TMR forecasts. Other companies to watch out for in the e-commerce logistics business are Gati Limited and Clipper Logistics Plc
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According to TMR, the global e-commerce logistics market had reached a valuation of US$146.14 bn in 2015 and will exhibit a high double-digit CAGR of 20.6% between 2016 and 2024.
The emergence of the contemporary B2C e-commerce model has forced companies to align and re-align their business models several times in the past years. Innovative delivery technologies are the key facilitator of this change. All eyes are on drone delivery, which will arguably be the biggest trend in the e-commerce logistics market in the coming years. Companies such as Amazon.com have already jumped into the fray with its Amazon Prime Air service that uses small drones to deliver packages in 30 minutes or less - about the same time that it takes to get a pizza delivered home. Drones, droids, and parcel copters are here to stay, says TMR.
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Moreover, the mushrooming of e-commerce startups in countries such as India , Brazil , Mexico , and Saudi Arabia will give the demand for e-commerce logistics a further boost. C2C e-commerce models are also projected to boost the market for e-commerce logistics.
In a space that's as competitive as e-commerce logistics, companies are forced to offer value-adds such as free delivery of goods and reverse logistics. Although most companies have a minimum value order for goods ordered in order for customers to avail free delivery, there are loopholes in this arrangement. The most common one is customers ordering goods to reach the stipulated minimum order for a free delivery and then returning unwanted goods. This burdens the reverse logistics chain and cause a spike in the cost incurred by e-commerce logistics companies.
Similarly, in developing countries where infrastructure challenges abound, last-mile connectivity is limiting the business of e-commerce logistics providers. These factors are expected to restrain the growth of the global e-commerce logistics market through the report's forecast period.
On the basis of service type, the report segments the global e-commerce logistics market into warehousing, transportation, and others. Of these, the transportation segment stood as the largest in 2015, accounting for a dominant 51.60 % of the market. This is thanks to the fact that the supply chain is pivoted on transportation. The growing emphasis on last-mile connectivity will give this segment a further boost.
The warehousing segment is further split into hubs/delivery centers, mega centers, and returns processing centers. Similarly, the transportation segment is divided into freight/rail, maritime, air/express delivery, and trucking/over road.
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By operational area, the segments of the e-commerce logistics market are domestic and international. The largest revenue share is contributed by the domestic segment, finds TMR. This can be attributed to the emergence of large domestic e-commerce companies such as Flipkart (in India ).
The report studies the e-commerce logistics market in North America , Asia Pacific (APAC), Europe , Latin America , and the Middle East and Africa . North America will continue to remain the largest regional market for e-commerce logistics through the report's forecast period - it stood at US$ 48.32 bn in 2015. Asia Pacific will show much promise with a CAGR of 22.4% from 2016 through 2024.
This review is based on a Transparency Market Research Report, titled " ."
The global e-commerce logistics market has been segmented as follows:
Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers. TMR's experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. Our business offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.
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