The increasing adoption of the real-time tracking technology, due to the surging integration of the internet of things (IoT) in the transportation and logistics sector, is one of the major factors fueling the demand for last mile delivery solutions across the globe. The tracking technology allows customers to gain real-time insights into the location of their packaging. On the other hand, the delivery-partner-centric real-time tracking technology allows businesses to get a holistic view of the efficiency of logistics.
This, in turn, inspires them to become more customer-centric. The adoption of this technology has propelled the expansion of the e-commerce industry. It has become imperative for both logistics service providers and e-commerce players to have a well-developed information technology (IT) infrastructure in place for enabling the efficient tracking of transactions and the movement of shipments at all times. Besides this, the huge funding being provided to last mile delivery start-ups is also fueling the last mile delivery market advancement.
Many venture capitalists and investors are making huge investments in start-ups operating in last mile logistics for expanding their businesses. For example, Lalamove, which is an on-demand logistics provider based in Hong Kong, raised funding worth $300 million in its series D round in 2019 for expanding its operations across Asia-Pacific (APAC). Furthermore, a U.S.-based company named Deliv, raised a funding of $80.4 million over five rounds. Moreover, in October 2018, the company received a funding of $40 million.
Besides the aforementioned factors, the emergence of business-to-business (B2B) e-commerce is also fueling the demand for last mile delivery solutions. Due to these factors, the global last mile delivery market is registering huge expansion. As a result, the market revenue is predicted to grow from $15.7 billion in 2019 to $117.9 billion by 2030. The market is also predicted to demonstrate a CAGR of 20.3% between 2020 and 2030.
When service is taken into consideration, the last mile delivery market is categorized into business-to-consumer (B2C) and business-to-business (B2B). Between these, the B2C category is predicted to exhibit the higher growth rate in the market in the forthcoming years. This is credited to the increasing adoption of omnichannel retailing, growing technical knowledge regarding the use of online platforms and smartphone apps, and changing purchasing behavior of consumers around the world.
Geographically, the last mile delivery market will demonstrate the fastest growth in Latin America, Middle East, & Africa (LAMEA) in the coming years, as per the estimates of the market research company, P&S Intelligence. This will be a result of the rising gross domestic product (GDP), increasing number of last mile grocery and food delivery start-ups, soaring adoption of omnichannel retailing, and the surging disposable income of the people residing in the developing countries such as Mexico and Brazil.
Hence, it can be said with surety that the popularity of last mile delivery solutions will soar in the upcoming years, mainly because of the expansion of the e-commerce industry, rising requirement for the real-time tracking technology, and the huge investments being made in the start-ups operating in the last mile logistics sector.