Micro-fulfillment centers shaping logistics

As e-commerce soars in India, the logistics industry is changing in a drastic manner, and for the better.

- Sandeep Chanda

At the heart of this change is the micro-fulfillment center, a game-changer in the last-mile delivery business. With demand for faster delivery growing among Indian consumers and businesses competing on such expectations, micro-fulfillment centers are fast becoming part of the logistics ecosystem, more so in urban areas. This modern way has transformed the logistics and supply chain industry. It decreases costs in conducting daily operations, thus increasing the effectiveness of delivery.

Micro-fulfillment centers have also surpassed the limitations of the traditional giant warehouses. These micro-hubs are designed to be much smaller, and distribution based. This makes it possible for retailers to stay competitive as the market shifts at a rapid pace.

Growth in online grocery orders, paired with the improvement in automation and robotics technologies, drove the MFC market forward and is still doing so. As consumer preference shifts more and more to convenience and speed, companies are fast adopting micro-fulfillment solutions to appeal to that trend in demand.

Changing e-commerce

The Indian online grocery market is estimated to reach US$ 26.93 billion in 2027 from US$ 3.95 billion in FY21, expanding at a CAGR of 33%, according to IBEF. However, the pandemic also resulted in a massive acceleration of this growth, thus shifting even the most traditional businesses toward online models. This brought upon the delivery aspect, an enormous challenge by itself as the increased orders have led to a major challenge: how companies can deliver as fast as possible without increasing costs.