Logistics firms under pressure; The race to deliver style

Time of India

a day ago

Logistics firms under pressure; The race to deliver style
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Also in the letter:
Ecommerce's in-house delivery turn flips third-party logistics biz script
Driving the news:
In March 2025, Valmo handled over two-thirds of Meesho's shipments, up from 30% a year earlier and just 5% in previous years, according to an ICICI Securities report.
The Bengaluru-based online retailer once relied heavily on third-party players, including Delhivery, Ecom Express, Shadowfax, and Xpressbees.
Now, Valmo acts as an aggregator, letting sellers choose their preferred transporter.
Ecom Express, now part of Delhivery, still counts Amazon, Meesho, Shiprocket and Nykaa among key clients.
Yes, but:
Growth muted:
Also Read:
Rapid delivery's in fashion at ecommerce, new-age apparel companies
Here's the catch:
VC rush:
The data play:
Way ahead:
Also Read:
IT's growth search takes them to doors of mid-market firms
New avenues:
But, why:
Number-wise:
Also Read:
Flipkart exits Blackbuck, Aditya Birla Fashion in block deals worth over Rs 1,250 crore
ABFRL exit:
Blackbuck stake sale:
Other Top Stories By Our Reporters
Swiggy may recover quick commerce share despite widening losses: Morgan Stanley |
LTTS bags deal to set up offshore development centre for US firm Tennant:
Global Picks We Are Reading
Happy Thursday! With Indian ecommerce firms insourcing deliveries, the third-party logistics sector is likely to witness consolidation. This and more in today's ETtech Morning Dispatch.■ India IT shifts focus■ Flipkart cashes out■ Morgan Stanley on SwiggyAs Indian ecommerce companies bring deliveries in-house, pure-play logistics companies are scrambling to stay relevant , a shift that is likely to accelerate consolidation in the sector.Amazon, Flipkart and Meesho account for 82% of India's ecommerce parcel volumes. Meesho, for instance, increasingly relies on its logistics arm, Valmo Analysts believe Meesho won't fully internalise logistics. Still, third-party operators remain in limbo.On an earnings call, Delhivery CEO Sahil Barua said the company cornered more than 100% of the industry's profit pool , calling out rivals for ongoing losses. After acquiring Ecom Express for Rs 1,407 crore in April, Barua said further consolidation is inevitable.Despite its bullish stance, Delhivery posted subdued ecommerce numbers in FY25. Express parcel revenue rose 5% year-on-year, while volumes edged up just 2%.New-age brands like Newme, Slikk, and Blipp, along with ecommerce players Myntra, Ajio, and Nykaa, are embracing the ultra-fast fashion delivery trend. The latest to join the race is Bengaluru-based D2C brand Snitch, which last week kicked off a pilot for its quick delivery service in the city.But is it worth the hype?Some industry insiders regard this as yet another shiny take on the quick commerce narrative. Unlike groceries, fashion is an experiential category. Moreover, supply chains (or logistics) are more complex, and high return rates render ultra-fast delivery a challenging model to scale.Investors are piling in. Slikk, which promises delivery in under 60 minutes, recently raised $10 million in a round led by Nexus Venture Partners. Snitch secured $40 million from 360 One Asset to fund offline expansion and a deeper push into quick commerce.To stay ahead of fast-moving trends, brands are leaning on proprietary AI tools and in-house data science teams. These systems sift through social media chatter, search patterns, and shopping behaviour to forecast demand, sometimes even before the customer knows what they want.The buzz is real, but so are the hurdles. Brands still need to sustain consumer excitement, manage inventory risk, and tackle return rates. Quick fashion may be gaining ground, but the jury's still out on whether speed alone will win the race.After a challenging year, India's IT industry is targeting growth beyond the Fortune Global 2,000 and Fortune 5,000, focusing on an underpenetrated segment: smaller and mid-sized enterprises with annual revenues of $1-5 billion.With large clients slow to deliver revenue, the natural pivot has been towards smaller firms.These companies, typically late adopters of technology, are now ramping up investments in cloud, cybersecurity, and digital transformation, driven by the rise of AI and accelerated digitisation. This shift presents a new opportunity for Indian IT services.Experts cite several reasons these clients could prove lucrative, including quicker decision-making, a lower barrier to entry, and a broader scope for delivering tech services.Crucially, many large enterprises are establishing global capability centres (GCCs) in lower-cost locations, such as India, and insourcing much of their tech work. This has pushed Indian IT majors to look beyond their traditional client base.The opportunity is real, but still early. Mid-market clients (with $100 million to $5 billion in revenue) contribute only 20-30% of total revenue for the top five Indian IT firms – TCS, Infosys, HCLTech, Wipro, and Tech Mahindra. Large enterprises continue to account for 60-70% of their business.Flipkart has fully exited its stakes in Aditya Birla Fashion and Retail (ABFRL) and Zinka Logistics, the parent company of trucking platform Blackbuck, offloading shares worth several hundred crores this week.On Wednesday, Walmart-owned Flipkart Investments sold its entire 6% stake in ABFRL through a block deal worth Rs 587.7 crore. The transaction involved 73.17 million ABFRL shares changing hands at Rs 80.32 per share, a 6.6% discount to the previous closing price.A day earlier, Quickroutes International, another Flipkart subsidiary, offloaded its entire 9% stake in Blackbuck, according to exchange data. The shares were sold in the Rs 420.06–420.25 range, valuing the deal at Rs 671.76 crore.Brokerage house Morgan Stanley believes that online food and grocery delivery company Swiggy's quick commerce business has a bright future. Although quick commerce has helped drive Swiggy's revenue growth, the company's expenditure on the sector continues to drag its bottom line down.As part of this collaboration, LTTS will establish a dedicated engineering centre in India to support Tennant's new product development, lifecycle management, and other core operations.■ Google DeepMind's CEO thinks AI will make humans less selfish ( Wired ■ Snap's Spiegel: Company is on 'cusp' of computing transformation ( The Information ■ Frugal tech: The start-ups working on cheap innovation ( BBC