5 important things about the eLogistics industry in India.
1 . India’s ecommerce startups spend as much as 30 percent of their net income on logistics (warehousing, payment gateways, among others). In the US, Amazon is reported to spend 11.7 percent.
2. The eCommerce market is estimated to grow up to $50 billion by the year 2020. The delivery market size and returns market account for 10% and 3%, i.e, $5 billion and $1.7 billion, respectively.
3. While most eCommerce shipments are being treated as an exception by VAT authorities as the product is being bought for individual consumption, the legality of an inter-state transactions is still a big question for eRetailers. On top of that, there are other taxes like Octroi and Entry Tax applicable in many states and municipal limits levied on the shipments bought from outside, which is then collected later from the customer at the time of delivery.
4. For all the shipments delivered successfully around 10% of shipments are returned back due to various reasons – product defect, customer dissatisfaction or simply a change of mind within the ‘free return’ period.
5. Logistics industry will earn about $5 billion annually from the booming eCommerce market by 2021.