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Home / India News / 2007 / March / March 19, 2007
IT Hardware Sector Drives the Growth of the Indian Third Party Logistics (3PL) Market

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IT Hardware Sector Drives the Growth of the Indian Third Party Logistics (3PL) Market

Mumbai, Maharashtra, India

The 3PL market in India's IT hardware sector is witnessing appreciable growth, primarily due to the increasing entry of multinational IT hardware companies, which replicate their global logistics outsourcing strategies to establish a network in the country. Moreover, the concept is fast gaining acceptance among domestic manufacturers, and in line with these trends, revenues are expected to grow to about 3.6 times their current size (as of 2005) in the next 5-7 years. To capitalize on the resulting opportunities, 3PL providers should add more value to their services, as clients, especially domestic ones, look for tangible cost and service benefits from outsourcing.

New analysis from Frost & Sullivan (www.transportation.frost.com), Strategic Analysis of 3PL Markets in the Indian IT Hardware Sector, reveals that revenues in this market totaled $105.9 million in 2005, and is likely to reach $381.9 million in 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with a strategic overview of the latest 3PL markets in the Indian IT hardware sector, then send an e-mail to Ravinder Kaur / Nimisha Iyer, Corporate Communications, at ravinder.kaur@frost.com / niyer@frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.

"The growth in the 3PL market in the Indian IT hardware sector is being driven by the increasing adoption of the 3PL concept by leading hardware companies," notes Frost & Sullivan Research Associate Deepak Mohan. "As these hardware companies grow and expand into new markets, 3PLs could witness a very healthy growth."

Furthermore, the implementation of value added tax (VAT) and abolition of sales tax will set 3PLs on the growth path. The uniform nationwide implementation of VAT and the abolition of central sales tax are likely to streamline the distribution of warehouses, allowing for leaner logistics and smooth flow of material. This could result in the operation of more 3PL managed multi-user warehouses. 3PL services could hence leverage economies of scale and their usage may further increase due to reduced costs.

However, increasing penetration aside, several home-grown hardware companies, especially UPS and peripheral, refrain from following the 3PL model, owing to proprietary and cost concerns.

"This apart, rising fuel costs and inadequate infrastructure are critical restraints for the growth of the 3PL sector," notes Mohan. "Overhead costs of 3PL operators are also comparatively high, resulting in higher service prices, which serve as a significant deterrent."

Although pricing is the key determining factor in choosing a 3PL provider, appropriate service levels play an equally important role since clients expect tangible benefits in both cost and service from outsourcing logistics. Hence, companies already in the market with a healthy presence should focus on improving service levels including honoring customer commitments, prompt deliveries, flexibility, and infrastructure investment.

Strategic Analysis of 3PL Markets in the Indian IT Hardware Sector is part of the Automotive & Transportation - Asia Pacific (ATAT-18) Subscription, which also includes research in the following markets: 3PL Market in the Indian Consumer Electronics and Durables Sector, 3PL Market in the Indian Retail sector, 3PL Market in the Indian FMCG Sector, 3PL Market in the Chinese FMCG Sector, 3PL Market in the Chinese Retail Sector, 3PL Market in the Chinese Automotive Sector, 3PL Market in India, and 3PL Market in Japan. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective, and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit www.frost.com.

Strategic Analysis of 3PL Markets in the Indian IT Hardware Sector
P007

Contact:

Ravinder Kaur
Corporate Communications - South Asia, Middle East
+91 (044) 4204 4515
ravinder.kaur@frost.com

Nimisha Iyer, Corporate Communications - South Asia & Middle East, Frost & Sullivan, +91 (022) 4001 3400 niyer@frost.com

Vanessa Quezada, Corporate Communications - North America, Frost & Sullivan, +1 210 477 8427 vanessa.quezada@frost.com

Source: Frost & Sullivan (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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