Owing to a significant growth in the D2C segment, third-party logistics (3PL) providers through their technological solutions and comprehensive and integrated services are making them indispensable partners, particularly for early-stage D2C brands, a recent survey highlighted.
According to a study by Redseer Strategy Consultants, while the annual D2C shipments have skyrocketed from 0.1 billion in 2019 to 0.6 billion in 2023, estimates indicate that the market could reach USD 2.2-2.7 billion by 2028, growing at 35-40 per cent year-on-year from 2023 to 2028.
“A significant portion of these shipments is attributed to the services of the 3PL providers, who play a major role in delivering superior customer service. 3PL providers offer tailored and comprehensive end-to-end logistics services, including warehousing, inventory management, shipment intelligence, and transportation. These services have become crucial for young brands that now have access to advanced logistics infrastructure without the need for significant capital investment,” the report said.
To gain insights into the needs of early-stage D2C brands, Redseer Strategy Consultants conducted over 60 interviews with emerging brands in India. The survey revealed a growing trend of these brands partnering directly with 3PL service providers, recognising their customised solutions approach. This strategy allows young brands to leverage 3PL expertise, adapt to their evolving logistical requirements, and concentrate on core business activities while solidifying their presence in today’s competitive brandverse.
According to the study, 3PL providers are upping their game with tech investments that deliver faster shipments, real-time tracking, and return prediction. They also offer smooth cash-on-delivery options with quick remittance, perfect for young brands’ cash flow.
Additionally, 3PLs support offline expansion with integrated logistics solutions, including warehousing, efficient freight options, and streamlined distribution to physical stores.
“Third-party logistics (3PL) providers are integral to the value-chain of the new age D2C brands. They are continuously innovating to address the unique needs of these brands, fostering partnerships from the early stages of brand journey,” Kanishka Mohan, Partner, Redseer Strategy Consultants, said.
Within the 3PL logistics landscape, Redseer has highlighted factors like brand and customer experience and operational efficiencies that are important for new-age brands when choosing their preferred partners. While both Delhivery and Bluedart stand out on overall metrics, Delhivery has outperformed in providing superior customer experience and features, as it provides a full stack solution.
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