E-Commerce Logistics Market Growth Set to Reach CAGR 20% by 2027

The E-Commerce Logistics Market is projected to expand at a Compound Annual Growth Rate (CAGR) of 20% between 2022 and 2027, with the market size expected to grow by USD 404.84 billion. This growth is driven by several factors, including the rise in cross-border e-commerce activities, the increasing popularity of social commerce, and the surge in e-commerce startups.

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Primary Growth Drivers

One of the primary drivers of market growth is the increase in cross-border e-commerce activities. Countries like the US, China, Singapore, Indonesia, Australia, France, Mexico, and India are seeing significant growth in this area. For example, China, India, and the EU are leading exporters of clothing, while France and the US dominate in beauty and personal care product exports. The rise in per capita income and accessibility to foreign brands is boosting consumer preference for cross-border e-commerce, subsequently increasing the demand for e-commerce logistics.

Emerging Market Trends

The rise of supermarket mini distribution centers is a key trend transforming the e-commerce logistics landscape. To meet the demand for faster order fulfillment, retailers and supermarkets are turning their stores into mini distribution centers, speeding up the delivery process. For example, Amazon.com has leveraged this approach, offering two-hour delivery for groceries to its Prime members in select US cities.

This strategy not only improves delivery speed but also enhances the efficiency of e-commerce logistics as more supermarkets adopt this model.

Key Market Challenges

High logistics costs pose a significant challenge to market growth. The rising prices of fuel and a shortage of skilled labor are increasing overall shipping costs. For instance, the cost of e-commerce logistics in the US rose from $117 billion in 2017 to $196.2 billion in 2020. Fluctuating crude oil prices are a major factor driving transportation costs, reducing the profitability of logistics service providers. Additionally, the demand for lower rates from customers exerts pricing pressure on these providers.

Furthermore, the increase in reverse logistics, which involves the cost-effective management of returned goods, also adds to the overall logistics costs. High return rates due to product flaws and delivery issues exacerbate these cost pressures, prompting firms to opt for more cost-effective surface transit methods, potentially impacting market growth.

Market Segmentation and Detailed Analysis

This report provides a comprehensive outlook on the market, including detailed segmentation by distribution channel (offline and online) and product type (top wear, bottom wear, coveralls, and others). It covers regions including North America, APAC, Europe, Middle East and Africa, and South America. The report presents market size data, historical trends from 2017 to 2021, and future projections in USD billion. The analysis includes the impact of high outdoor sports popularity, rising private-label brands, and the growing geriatric population.

Distribution Channel Insights

The domestic segment is expected to witness significant growth, despite the rise of online shopping. Vendors are expanding their retail outlets to boost offline sales through specialty stores and other retail formats. For instance, Adidas operated 2,184 retail stores and 14,000 mono-branded franchise stores as of December 2021, positively impacting market growth.

Product Type Insights

The top wear segment dominates the market due to its short replacement cycle. This category includes shirts, t-shirts, coats, and jackets made from various fabrics like cloth, polyester, suede, and mesh. Consumers select top wear based on weather conditions, terrain, and activities such as camping, hiking, or water sports. This segment is crucial for attracting new customers, particularly adults and young adults inclined towards outdoor activities. Competitive pricing and diverse product offerings are key growth drivers.

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Regional Market Insights

APAC is expected to contribute 57% to market growth by 2027. The region's e-commerce logistics market is expanding due to the growing e-commerce industry in countries like China, India, and Japan. The market in China, for example, is projected to grow by over 63% between 2018 and 2023. Local and international e-commerce brands are vying for market share in China, creating a competitive environment.

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Technavio Research

Jesse Maida

Media & Marketing Executive

US: +1 844 364 1100

UK: +44 203 893 3200

Email: media@technavio.com

Website: www.technavio.com/


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