E-Commerce Logistics Market by Usage, Service and Geography - Forecast and Analysis 2023-2027

E-Commerce Logistics Market Forecast 2023-2027

The e-commerce logistics market is estimated to increase by USD 404.84 billion and grow at a CAGR of 20% between 2022 and 2027. The market's growth is driven by several factors, including the increasing popularity of cross-border e-commerce transactions, the rise of social commerce, and the proliferation of e-commerce startups. However, challenges such as high logistics costs, infrastructure constraints in emerging markets, and strict regulations governing e-commerce logistics remain significant obstacles. Despite these challenges, the market continues to expand as companies innovate and adapt to meet the evolving needs of consumers in the digital age. The market research and growth report provide a comprehensive analysis of these factors, offering insights into the trends and challenges that shape the e-commerce logistics landscape.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

The market share growth by the transportation segment will be significant during the forecast period. Transportation is expected to have the largest market share in the market due to the use of different modes of transport, such as road, rail, air, and water. As logistics services require high investment and expertise that add significantly to operational costs, many e-commerce companies are outsourcing these services to logistics providers. There is a growing importance of transportation in the entire chain of e-commerce logistics processes as various large and small logistics companies are focusing on last-mile delivery. 

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The transportation segment was the largest valued at USD 43.67 billion in 2017.  The integration of e-commerce logistics with transportation management software (TMS) has boosted the market growth. TMS aids in planning deliveries across the supply chain. It helps in lowering the cost of transportation as it provides a smarter way to transport products along the supply chain. Further, optimizing the flow of goods and leveraging consolidated capacity have increased the growth potential of the market. TMS also helps in optimizing the workflow by increasing opportunities for freight consolidation and intermodal shipping. Transportation services for cross-border e-commerce are outsourced because these are highly capital-intensive and require a high level of expertise. Several e-commerce logistics service providers are expanding their service portfolio geographically.

Key Regions

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APAC is projected to contribute 57% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC has been growing because of the growing e-commerce industry in countries such as China, India, and Japan. For instance, the e-commerce industry in China is expected to grow by more than 63% during 2018-2023. Some of the major e-commerce companies in China, such as Alibaba.com and JD.com. The market in China is quite competitive, with local and international e-commerce brands contesting for consumer attention and market share. The promising growth potential offered by the market in the region is likely to draw the interest of new vendors.  

Market Dynamics and Customer Landscape

The market continues to flourish, fueled by the growing number of internet users and their preference for online shopping. E-commerce websites act as intermediaries, linking consumers with suppliers and managing transactions. Logistics networks, comprised of warehouses, hubs, delivery centers, and returns processing centers, are essential for efficient storage and distribution. With the surge in cross-border e-commerce activities, air and express delivery services assume a pivotal role in meeting global demand. Advanced technology and business analytics support these components, enhancing supply chain solutions. House wraps, a crucial packaging solution, protect goods during transportation and storage, ensuring their integrity and preserving their quality. Logistics professionals employ digital technologies to optimize transportation, warehousing, and packaging processes, catering to a wide range of online businesses, from everyday essentials to groceries. Mega centers and rail infrastructure further strengthen the logistics ecosystem, enabling seamless cross-border trade and bolstering the operations of e-commerce companies. Our researchers conducted an in-depth analysis of the market, utilizing 2022 as the base year, and identified key drivers, trends, and challenges. A comprehensive understanding of these factors will enable companies to refine their marketing strategies and secure a competitive edge.

Key Market Driver

The increase in cross-border e-commerce activities is one of the key drivers supporting the global market growth. Cross-border e-commerce is significantly high in countries such as the US, China, Singapore, Indonesia, Australia, France, Mexico, and India. For instance, China, India, and the EU are the top exporters of clothing in the world. France and the US are the major exporters of beauty and personal care products. Customers' preference for cross-border e-commerce is increasing owing to the rise in per capita income and the growing accessibility to foreign brands. The increasing cross-border trade is also leading to a rise in the number of trade corridors.

Trade corridors are integrated transport networks between geographical regions to facilitate trading, and they promote economic development. These corridors comprise integrated infrastructure, such as railroads and highways, which link cities or countries. Moreover, In cross-border e-commerce, logistics plays a major role as the movement of goods depends on transportation and distribution networks. Hence, with the rise of cross-border e-commerce, a simultaneous increase in demand is expected during the forecast period.

Key Market Trend

The emergence of supermarket mini-distribution centres is one of the key factors for global market growth. The rise in demand for faster order fulfilment has resulted in shippers moving storage and manufacturing closer to consumers. Hence, many retailers and supermarkets are focusing on turning every store into a mini distribution centre. This approach helps in speeding up the delivery process. For instance, if somebody orders a product, it is picked up and delivered by his/her local store. This process is quicker than waiting for items to be delivered from a distribution centre.

However, some major e-commerce companies have been focusing on establishing supermarket mini-distribution centres for the faster delivery of products. For instance, in February 2018, Amazon.com, Inc, an e-commerce company, announced that people subscribing to its Prime service in four cities in the US, namely Austin, Cincinnati, Dallas, and Virginia, can get groceries from Whole Foods Market IP, L.P. delivered within just two hours of placing an order for free. As a greater number of supermarkets and stores have begun to act as mini distribution centres, e-commerce logistics are expected to become more efficient in the future.

Key Market Challenge

The high logistics cost is one of the factors hindering the global market growth. The shortage of skilled labour and the rising fuel prices are increasing the overall shipping cost. For instance, the e-commerce logistics cost in the US increased from around USD 117 billion in 2017 to approximately USD 196.2 billion in 2020. The volatility in crude oil prices is one of the major cost determinants for the increase in transportation costs, reducing the profitability of service providers. Moreover, the constant demand for lower rates from customers creates pricing pressure on the service providers.

Further, there is an increase in reverse logistics. Reverse logistics refers to the cost-effective planning and management of the flow of raw materials, in-process inventory, finished goods, and related information from the point of consumption of goods to the point of their origin. A high number of shipment returns due to product flaws and delivery failures also increases logistics costs. Such cost pressures are driving firms to switch to surface transit for deliveries, which, in turn, might affect market growth negatively.

Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Aramex.- The company offers to design online storefronts, update online catalogues, and manages orders and payments. After creating an online platform, customers can begin purchases that can be delivered both domestically and internationally.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• Agility Public Warehousing Co. K.S.C.P
• C H Robinson Worldwide Inc.
• CMA CGM SA
• DB Schenker
• Deutsche Post AG
• dotdigital Group Plc
• DSV AS
• eStore Logistics
• FedEx Corp.
• Gati Ltd
• GXO Logistics Inc.
• Kenco Group Inc.
• Kuehne Nagel Management AG
• Nippon Express Holdings Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments. 

• Usage Outlook 
  • Domestic
  • International

• Service Outlook 
  • Transportation
  • Warehousing
  • Others

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

You may also interested in below market reports:

• Connected Logistics Market - Connected Logistics Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, Germany, UK, China, India - Size and Forecast 
• Road Logistics Market - Road Logistics Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, China, Japan, Germany, France - Size and Forecast
• Spare Parts Logistics Market - Spare Parts Logistics Market Analysis APAC, Europe, North America, South America, Middle East and Africa - China, US, Germany, Japan, India - Size and Forecast

Market Analyst Overview

The market is propelled by various factors such as the rapid growth of e-commerce startups, increasing internet penetration, and advancements in digital technology. Suppliers and logistics professionals are leveraging technology and business analytics to enhance supply chain solutions, ensuring efficient cargo delivery for both C2C and B2C e-commerce platforms. With a focus on air, express, freight, rail, trucking, and maritime logistics, the industry caters to diverse sectors including retailing, electronics, furniture, and fashion. Technological innovations like drone delivery services, IoT, and barcode systems are revolutionizing last-mile delivery and inventory management. Venture capitalists are actively funding logistics companies to expand their operational areas and establish mega centers and hubs for efficient global order fulfillment and returns processing.

In addition, technological advancements, including transportation management software and digital technologies, are reshaping the landscape, enhancing operational efficiency and supply chain visibility. From air and express delivery to freight and rail services, a diverse range of transportation options cater to different needs. Warehouses, equipped with shelf life management systems and packaging solutions, serve as hubs for storing and processing goods. Digitalization and the Internet of Things further optimize processes, enabling real-time tracking and efficient order fulfillment. Third-party logistics providers like DHL play a crucial role in multi-client fulfillment models, ensuring seamless delivery of commodities, including everyday essentials and personal care items, to consumers worldwide.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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