Cross Border Logistics- India Perspective

Pradeep Srivastav
Nov 1 · 3 min read

India eCommerce has been one of the most growing markets and it’s expected to grow to US$ 200 billion by 2026 from the level of US$ 48.5 billion in 2018. Cross border eCommerce has been gaining more and more attention as Indian Consumers like to buy brands available across borders for many of the categories. Cross border essentially means a customer in India wanting to buy a product of any other origin country across borders through market place models ecommerce sites like Amazon etc. So cross border essentially is buying product from outside borders.

India contributes to 0.8% of a $600 billion global cross border ecommerce market. Cross border in India has been gaining momentum and is expected to be one of the most growing areas in eCommerce. The B2C cross border is expected to cross US$ 2 Billion by 2020. Cross border eCommerce is expected to grow at a rate of 25% and is expected 2x faster than Domestic. Countries like Singapore has 55% of its ecommerce transactions as cross border.China-India is expected to be the biggest cross border market. Most of the retailers expect the cross border share to grow and multiply 2x faster. The ticketsize generally on a cross border order is a good value, which not only helps more revenue generation but good profits. So, cross border is in one of the most studied segments on which every retailer,ecommerce player and logistics company is working upon. Markets on ecommerce cross borders are essentially China , US, Singapore, Hong Kong, Indonesia & Middle East.

However cross border has multiple challenges which needs improvements. Reducing the order to delivery cycle, Effective logistics processes, Good understanding of diversified regulations and customs, Good Shipping, Warehousing requirements, Fulfilment solutions, Visibility from the first mile to the last mile, Controls in the entire supply chain, Customs and Regulations, able to fulfil the customers’ expectations & Customer offerings.

Typical eCommerce Cross Border Value Chain- Case 1

Typical eCommerce Cross Border Value Chain- Case 2

Above value chains are shown taking India and China as cross border countries. Similar models apply for other countries. Few typical logistics models which work are on global efullfillment hub, where orders are received and shipped to customers everywhere in the world. Regional fulfilment hubs, where the merchant warehouses the products and ships orders to customers within that country/region with the help of a logistics providers. So ideally you need to get into choosing optimal fulfilment process and offer premium delivery choices. Direct shipping from the origin country to the end shipper through various International express companies, freight forwarders consolidate and then deconsolidate by importing in bulk.

These all models currently lead to high shipping costs, unpredictable customs duties, multiple channels and large order to deliver cycle. This emerging business is a big revenue stream for the eCommerce logistics companies. With customs now becoming stringent and having strong control measures, new processes need to be in place.Though most of them are working on finding efficient logistics supply chain models, there is still a lot of area of improvements required with following the new customs rule.

The winner of this game would be the one who can handle right from the first mile, line haul, custom clearance, warehousing/fulfilment and then the last mile themselves. There is a need to find out the right supply chain model to handle this emerging market and setup a smooth ops with less shipping costs and duties, less order to delivery cycle, methodology to handle returns and exchanges. Once this is done, I am sure this market will get a further boost on growth and a happy customer.

Pradeep Srivastav

Written by

Blogger on Supply Chain/ Sales & Personality Development/ Fitness

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