Gurugram-based logistics startup Delhivery’s market share in ecommerce shipments dropped to 21.5% in the financial year 2022-23 (FY23) from 23% in FY22, according to a report by brokerage firm Bernstein.

The logistic startup’s market share is expected to fall further to 19% by FY30, the brokerage was quoted as saying in a report by ET.

According to Bernstein, Delhivery gained substantial market share in ecommerce shipments in FY22. Its share rose to 22-23% in FY22 from 15-16% in FY21, led by general fragmentation of shares in the Indian e-commerce space. Addition of new clients such as Shopee and players such as Meesho scaling up their operations also contributed to the growth. 

While Delhivery’s ecommerce parcel volume is expected to grow in the 14-17% range on a year-on-year basis till FY30, its market share will continue to drop with other third-party logistics players looking at potential gains, Bernstein said.

Bernstein attributed the decline in Delhivery’s volume growth to the closure of online marketplace Shopee. “However, the impact will moderate from the March quarter as Shopee exited in the March quarter last year,” the report added. 

Shopee, Singapore’s ecommerce player, decided to shut down its India operations last year due to market uncertainty.

Founded in 2011 by Mohit Tandon, Sahil Barua, Bhavesh Manglani, Kapil Bharati, and Suraj Saharan, Delhivery provides a full suite of logistics services such as express parcel transportation, LTL and FTL freight, reverse logistics, cross-border, B2B & B2C warehousing, and technology services. 

The startup got listed on the stock exchanges in 2022. As per the brokerage, the integration of Spoton with Delhivery after the company’s initial public offering “did not go as planned, leading to a loss of customer confidence”.

“Delhivery showed significant promise of growth ahead of its IPO. The story was about the high-growth e-commerce market and how Delhivery will sustain/win share due to its unique model (and scale) and grow at over 30-40% run rate. The growth and margin disappointments suddenly after the IPO are not just a mystery but a case of poor execution. To that extent, this serves as a red flag when evaluating the company. This will heal only after a string of successes,” it added.

Delhivery’s consolidated net loss surged 54.6% to INR 195.6 Cr during the third quarter of FY23 from INR 126.5 Cr in the year-ago quarter. However, net loss declined 23% on a quarter-on-quarter basis from INR 254 Cr in Q2 FY23. Revenue from operations declined 8% year-on-year (YoY) to INR 1,823.8 Cr during the quarter.

Earlier this month, venture capital (VC) firm Tiger Global again offloaded 1.17 Cr Delhivery shares in the open market.Last month, SoftBank also sold 2.8 Cr Delhivery shares worth INR 954.2 Cr via multiple block deals in the open market. 

Shares of Delhivery ended 2.8% higher at INR 336.95 on the BSE on Thursday (April 20).