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3PL market revenues estimated to grow to $140 million by 2012: Frost and Sullivan research

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MUMBAI: Frost and Sullivan's Automotive and Transportation Practice South Asia and Middle East will be hosting an analyst briefing webinar on 15 December from 11 am to 12 noon, on rapid growth of organised retailing - driving the Indian retail 3PL market.

The booming Indian economy is leading to the burgeoning purchasing power of the consumers and the rapid growth of the retail sector, especially the organised retailing segment. Entry of several international retailing companies, along with domestic major industrial groups focusing on the retail sector is driving this growth.

However, success in this competitive and dynamic sector depends on achieving an efficient logistics and supply chain, which could be provided by professional logistics service providers such as the 3PL companies. The 3PL market revenues in this sector are estimated to grow from $49.5 million in 2005 to $140 million by 2012, at a compound annual growth rate (CAGR) of 16.0 percent, asserts an official release.

While the market is continually expanding, 3PL service providers in India need to address a few challenges such as shortage of skilled manpower and highly diverse geographic conditions to gain maximum share in this market.

The number of participants in this market has grown to be more than 400 in 2005. The Indian retail 3PL industry can be divided into three distinct tiers: national 3PL companies with nationwide presence, regional 3PL companies with a strong presence in one or two regions, and local 3PL companies with small or remote presence.

Frost and Sullivan's research has identified that the largest market segment for 3PL services as of 2005 is transportation, followed by freight forwarding.

Frost and Sullivan Automotive and Transportation Practice industry analyst Srinath Manda said, "In this robust environment, it is important for service providers to customise their service offerings coupled with competitive rates in order to truly capitalize this opportunity."

Recognising the importance gained by the 3PL market in the Indian retail sector, this briefing is structured to address retail 3PL market definitions and segmentation, market trends and growth drivers, market size and forecasts, end-user analysis, industry profile and major participants, industry challenges, and future opportunities, adds the release.

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