The report states that new-age platforms are expanding quickly, led by two-wheeler parcel demand and growing adoption among small and medium businesses (SMBs)
Emphasising that new-age intracity logistics is scaling rapidly and competition has intensified across cities, a report has stated that the market is still deeply spot-driven and dominated by fragmented operators.
A report by Redseer Strategy Consultants highlighted that new-age platforms are expanding quickly, led by two-wheeler parcel demand and growing adoption among small and medium businesses (SMBs). Competition has intensified as digital players enter multiple cities, focusing on faster turnaround and transparent pricing, as per the report.
“A significant portion of intracity logistics is still unorganised, dominated by local fleet owners, driver-cum-owners and hyperlocal brokers. SMBs gravitate towards fleet contractors for reliability, but pivot to local nakkas when cost and flexibility take priority,” the report pointed out.
The report noted that market expansion toward USD 2 to 2.5 billion by FY30 will be driven by deeper penetration in SME freight, organised retail replenishment. Organised share will rise as barriers to adoption reduce and digital value propositions align better with SMB expectations, the report emphasised.
Markets like Bangalore show higher partner earnings and utilisation due to strong demand and tighter supply. The report stated that Mumbai delivers healthy gross margins, but contribution margins remain pressured as incentives and discounts rise in a more competitive environment. Order fulfilment is lowest in high-demand, low-supply cities where partners expect higher payouts. High fulfilment rates correlate directly with stronger gross margins and better city-level performance, the report pointed out.
The report mentioned that platforms using commission-led models see lower partner earnings, resulting in limited working hours and slower scale up. Commission model tends to perform better in hyperlocal segments, but struggle with larger ticket and longer distance orders, it added.
