IN APRIL 2016, Deloitte India’s joint report with the Confederation of Indian Industry (CII), titled ‘e-Commerce in India: A Game Changer for the Economy’, projected that the Indian e-commerce industry will form the largest part of Internet market, commanding a value of $100 billion by 2020. The study attributed the growth projections to the emerging tech disruptions such as digital payments, hyperlocal logistics, analytics-driven consumer engagement, and digital advertisements.

Almost seven-and-a-half years later, in October 2024, Deloitte India again released a report saying that India’s e-commerce sector is likely to reach $325 billion by 2030, registering a CAGR of 21%. “This expansion is driven by increased spending from affluent and middle-class households. Government and private sector partnerships, along with strategic M&As, are crucial for this growth,” said the report. Looking at the industry from the vantage point of both the reports, the size of the industry is set to become three-fold in the 10-year period between 2020 and 2030.

In fact, between 2016 and now, the rising e-commerce market has had a ripple effect on the economy and has provided a significant fillip to the tertiary sectors — MSMEs moving up the value chain, Software-as-a-Service (SaaS) platforms gaining traction, and logistics getting a makeover with new-age startups. In fact, logistics — synonymous with freight forwarding, courier services, transport and slow-moving railway wagons — has witnessed a complete metamorphosis from its earlier avatar to a technology-enabled, lightning-fast service, with the emergence of e-commerce. Disruptive business models powered by technology are being used by new-age logistics partners to cater to the dynamically changing needs of e-commerce businesses.

A few of these startups in the logistics space hopped on to the e-commerce bandwagon — some a decade ago — and have carved a niche for themselves. Fortune India has identified five such ventures as part of its Most Promising Startups issue. XpressBees tops the list with revenues of ₹2,604 crore in FY23 — as per data from Tracxn — followed by Shiprocket, LoadShare, Cogoport, and Shipsy.

XpressBees, founded in 2015 by Amitava Saha — who is also one of the founders of FirstCry — provides B2C, B2B, cross-border logistics and 3PL (third-party) logistics. The company facilitates more than 3 million shipments across over 20,000 pin codes. It has a network encompassing 3,500 service centres, 150 hubs, and a team of over 28,000 field representatives.

Shiprocket, an e-commerce enablement platform, logged revenues to the tune of ₹1,358 crore in FY24, according to data from Tracxn. Meanwhile, LoadShare’s revenues stood at ₹348 crore in FY24, according to Tracxn data. LoadShare started off in 2017 with partial truckload (PTL) services for clients, focussing on smaller towns, but later tapped into quick commerce, dark stores and warehousing solutions.

It is evident that e-commerce is the common thread amid the new-age logistics players. In line with the adage, ‘necessity is the mother of invention’, Saha founded XpressBees when he realised that the existing logistics players were mostly into third-party logistics, warehousing, and business to business (B2B), and were not sufficiently catering to the needs of e-commerce players like FirstCry. “The current set of logistics partners were not giving us what we wanted in terms of e-commerce deliveries or special deliveries for FirstCry customers,” Saha, also MD & CEO of XpressBees, tells Fortune India.

Having deep roots in the startup ecosystem came as an advantage. “Being a startup founder myself, I knew other founders well. Paytm had just launched the Paytm Mall. Snapdeal and Shopclues were a couple of years old. They contacted me. So, that is when I thought of setting up something that could help other customers as well. And that is how it all started,” Saha says. Almost a decade later, Saha has plans to go public, though he does not share a timeline.

“We started off as an e-commerce logistics company. That is the bulk of what we do. And e-commerce has grown very well. Whatever we are today is primarily built on the back of the e-commerce logistics,” says Saha.

According to him, B2C accounts for the largest share of revenues for the company at about 75%, while the other three verticals — B2B, 3PL, and cross-border logistics contribute to the balance 20-25%.

Similarly, the idea behind Shiprocket — which was founded in 2017 and offers comprehensive tech services to independent smaller merchants — came from a product around helping small and medium enterprises go online. “We operated in the direct commerce part of the market. We provided the operating system and digital infrastructure to small merchants, selling either offline or through Instagram directly... But we realised that the smaller merchants almost always struggled with cash on delivery and proper shipping, says MD & CEO Saahil Goel, adding that a chunk of the unstructured commerce market was with retail couriers. “That is how this business was happening, until we became a middleware between the two.”

Today, e-commerce and parcel shipping account for about 75% of Shiprocket’s business, with about 150,000 small businesses actively using its services every year, says Goel. “Today, we deliver over a 100 million transactions every year,” he says, adding that micro SMEs and home businesses are trying their services out across fashion, textiles, jewellery, ethnic products, and wellness.

The players are bullish on the medium- to long-term outlook for e-commerce opportunities. “E-commerce has grown and will definitely continue to grow. In different verticals, the e-channel or the electronic channel is different. For example, for electronics and mobile phones, 50% of the transactions today happen through e-commerce. Fashion is in early double-digits. Heavy electronics like consumer durables are still in low single digits. So, it is about how the industry is transforming,” says Saha.

Talking of the other areas, Saha says that while airline tickets are 100% online today, as are classifieds, he thinks that offline will always exist.

In the third-party logistics or the warehousing space, Saha is of the view that more and more industries will become omnichannel. “They will support both online and offline, so your warehouse needs to be technologically equipped to support both the channels from a single warehouse. And that requires certain technology innovations. We have that. Using the same warehouse for physical retail and e-retail is another trend we are heading towards,” he points out.

In fact, Shiprocket launched a data-driven marketing automation platform, Engage 360, in August last year with an aim to facilitate business growth for MSMEs. Engage 360 provides the right tech stack solution to MSMEs, the company claims. Powered by this platform, more than 150,000 Indian merchants deploy automation, and intelligence to drive growth, and optimise marketing expenditure, the company says.

The startup is of the view that advanced data analytics along with comprehensive marketing tools will help merchants compete in the fast-paced logistics landscape, ensuring sustainable growth. It is growing by catering to the emerging needs of its core customers — small merchants, Shiprocket says. “The potential of doing this middleware business is massive because the same merchants we provided shipping have over a period of time started feeling the need of warehousing, packaging, payments, and advertising. So, we are plugging into all kinds of providers and are able to offer them [everything] on one single platform,”says Goel.

Meanwhile, these companies are also eyeing cross-border e-commerce. “Traditionally, we have associated cross-border primarily around freight forwarding or air cargo. But I believe that there is another area that is evolving in cross-border logistics. That is cross-border e-commerce, where people will order from an Amazon or eBay in the US and the order will be fulfilled by a seller in India,” says Saha of XpressBees.

The company got into cross-border e-commerce about a year and a half ago. “When we started, cross-border e-commerce was nothing. Right now, we have a few thousand shipments every day,” says Saha, adding that the segment is growing steadily.

Agrees Goel of Shiprocket. “We are working on new supply chains under which we are helping our merchants sell cross-border... say to the U.S., Middle East, and Australia by listing on eBay, Amazon, etc. We have made it possible to ship overseas in a cost-effective way,” he says. Meanwhile, Saha says that accessories, junk jewellery, and fashion account for the key shipments for his firm in the cross-border segment. His plans to go public hinge on the back of innovative business models like these and expansion in the other segments.

For the other players as well, there’s more excitement up ahead.