MARKET OVERVIEW- GLOBAL REVERSE LOGISTICS MARKET
The global reverse logistics market was valued at USD 751.6 Million in 2022 and is projected to grow at a CAGR of 6.93 % for the forecast period of 2023 to 2029. The global market is estimated and forecasted in terms of revenue (USD Million) generated by the reverse logistics market.
Reverse logistics is an important aspect of supply chains that directly impacts the return of products from the end consumer back to the manufacturer. The reverse logistics is important for to count on customer’s satisfaction that customer would get the good experienced while returning product so it is more likely possible that customer will often shop from the company. With the help of reverse logistics, it is easy to manage the reverse travel of your product back into the supply chain, which can help avoid making the same mistake twice and allow you to reutilize as many components of your product as possible.
In addition, with the help of reverse logistics the original shipping of goods and the return/reimbursement of goods as well as quickly refunding or replacing goods can help restore a customer’s faith in a brand. The increasing adoption of reverse logistics in the various end-user sectors will propel market growth. Many companies are adopting reverse logistics practices for cost-saving and customer retention. Reverse logistics are variable according to the industry and there are different economic incentives for improving reverse logistics management that further positively influence market growth.
MARKET DRIVERS
The global Reverse Logistics market is driven by the increasing expansion of the e-commerce industry, which is likely to drive market growth over the forecast period. The increase in the e-commerce industry has led to an increasing consumer preference for shopping online. While purchasing the product on the online platform. Consumers have a choice regarding product displacement. A further increase in product recall results requires automation to handle the operations smoothly such as receiving, reviewing, reallocating, and repeating. Many companies today are still working manually. The increasing product returns owing to the increasing e-commerce industry. According to the study, the ecommerce industry estimates that for conventional retail 5% of purchases get returned. The e-commerce industry is growing, which results in an increasing number of returns. The increasing volume of returned goods requires automation to simplify the process. The automation in reverse logistics makes the process much faster than manual operations. Thereby increasing the reverse logistics market.
MARKET OPPORTUNITIES
Technological advancements such as blockchain enable better tracking and transparency of the entire product life cycle, starting from the acquisition of component materials by the manufacturer to the final disposal of the product. Leading market players in the logistics industry have begun testing and deploying blockchain technology to expand their reverse logistics operations. For example, Walmart Canada uses blockchain to automatically generate invoices, eliminating time-consuming freight bill audits. Supply chain leaders have implemented a combination of blockchain and reverse logistics strategies to manage product lifecycles such as reclamation, recycling and disposal. Blockchain technology also helps in tracking returns and identifying high return issues, which creates opportunity for reverse logistics.
MARKET RESTRAINTS
The reverse logistics is an expensive process as it includes returning products, and getting them from end-users back to the manufacturer or warehouses. It requires a certain system to implement the process, such retail companies, returned products have one of the highest costs of any type of inbound logistics. Return products can include the additional cost of binding warranties, return policies, and service contracts. Thus, reverse logistics is an expensive yet important process. Manpower, transportation, automation, the lifecycle of a product, which includes recycling, and much more. The lack of control regarding quantity, quality and timing of the returned products among manufactures also harms the market growth.
MARKET GROWTH CHALLENGES
The lack of awareness and lack of control of manufacturers over reverse logistics. The increasing globalization and industrialization and growing ecommerce industry will force the manufacturer to adopt intensive competition, innovative technologies, process re-engineering, and strategies such as efficient supply chain management. Reverse Logistics is a complicated process that requires knowledge in terms of continual audit of returns, determining the best disposition of products that is both economically and technically feasible, warehouse and transportation management, recycling programs, and other related issues. The aforementioned cons of reverse logistics are expected to challenge the global reverse logistics market in the foreseen period.
CUMULATIVE GROWTH ANALYSIS
The report provides an in-depth analysis of the global reverse logistics market, including market size, and compound annual growth rate (CAGR) for the forecast period of 2023-2029, considering 2022 as the base year. Increased innovation and the development of automation technologies is expected to witness growth at a specific CAGR from 2023-2029.
REVERSE LOGISTICS MARKET SEGMENTAL OVERVIEW
The Global Reverse Logistics Market consists of different market segments like By Return Type, Application, Service, and geography.
REVERSE LOGISTICS MARKET BY RETURN TYPE
The Reverse Logistics market on the basis of return type include:
- Recalls
- Commercial Returns
- Repairable Returns
- End-of-use Returns
- End of life returns
The recalls segment is expected to witness high growth over the estimated time period. Products that have been made obsolete due to new product development and products that have been recalled by the manufacturer or dealer due to changes in portfolios or product manufacturing errors are another category that creates a return flow of material that has more than scrap or waste value. Many leading auto manufacturers are adopting reverse logistics through the means of product recalls, due to the rise in government regulations for passenger safety and reducing e-waste. Due to this factor, the recall segment is expected to dominate the market over the forecast period.
REVERSE LOGISTICS MARKET BY SERVICE
The Reverse Logistics market on the service of include:
- Transportation
- Warehousing
- Reselling
- Replacement Management
- Refund Management Authorization
On the basis of service, the replacement management segment holds the largest share of the reverse logistics market. As the e-commerce industry grows, exchange and return services should be done efficiently, and reverse logistics services are necessary to perform these tasks. Due to this factor, the replacement management segment is expected to lead the market during the estimated time period. This is expected to accelerate the demand for the reverse logistics market.
REVERSE LOGISTICS MARKET BY APPLICATION
The Reverse Logistics market on the basis of application include:
- E-commerce
- Automotive
- Pharmaceutical
- Consumer Electronic
- Retail
- Luxury goods
Based on application, the e-commerce segment holds the largest share of the reverse logistics market. The e-commerce segment is witnessing significant growth due to the increasing tendency of users to shop online and its increasing usage and adoption. Reverse logistics plays an important role in the e-commerce industry and helps to replace and resell products along with assisting in transportation, which contributes to the growth of the market. The above factors are leading to the high adoption of reverse logistics in the e-commerce industry, thereby contributing to the generation of more revenue.
REVERSE LOGISTICS MARKET BY GEOGRAPHY
The Reverse Logistics market is studied for the following region:
- North America
- Europe
- Asia-Pacific
- Rest of the World (RoW)
For the reverse logistics market, Asia Pacific is expected to witness the largest share in the reverse logistics market. The increasing use of e-commerce is resulting in increased revenue for the region, which is expected to contribute to the growth of the market. In addition, the growth of the manufacturing industry in developing countries across the region along with increasing demand for reverse logistics for electric vehicles is expected to fuel market expansion. Therefore, due to the above factors, the usage of reverse logistics in Asia Pacific is high and contributes more to revenue generation.
COVID-19 IMPACT ANALYSIS ON THE GLOBAL REVERSE LOGISTICS MARKET
Axiom MRC provides a 360-degree analysis of the micro and macro-economic factors of the reverse logistics market. The report included an exclusive analysis of the impact of COVID-19. In addition, the report also studied a complete analysis of changes in the global reverse logistics market, spending, and economic and international policies on the supply and demand side. The pandemic has resulted in online buyers on the e-commerce platform due to the travel restrictions that make many consumers go online shopping. According to the study by Deloitte, during COVID-19 retailers experienced a surge in online sales activity at the height of the pandemic, more than 20% of the top US retailers were online only. The permanent and temporary store closures will force customers to make these returns via mail, and increasing delivery and processing expenses will present a new set of challenges. Companies with pre–COVID-19 sales penetration of 80% in-store and 20% online typically experienced a total average return rate of 10%. Due to COVID-19 and health concerns resulted in increased online purchases that makes retailers must prepare for an unprecedented volume increase in returns.
COMPETITIVE LANDSCAPE ANALYSIS
The competitive landscape analysis of the reverse logistics market is primarily focused on expanding the global growth of the reverse logistics market with new return type innovation, business expansion, and the increasing presence of a range of manufacturers operating in the reverse logistics market has led to growing demand for the market.
The key players studied in the market are
- Ecom Express (India)
- Safexpress (India)
- Core Logistic (India)
- Yusen Logistics (Japan)
- DB Schenker (Germany)
- Kintetsu World Express (Germany)
- C.H. Robinson (United States)
- FedEx (United States)
- The Deutsche Post (Germany)
- United Parcel Service (UPS) (United States)
- CCR LOGISTICS SYSTEMS AG (Germany)
- First Flight (India)
RECENT DEVELOPMENT:
February 2022: Deutsche Post DHL Group built RMS which connects and enhances the entire returns ecosystem – enabling companies to streamline return requests. DHL Supply Chain can provide its customers with a best-in-class suite of e-commerce solutions with Reverse Logix.
November 2022: UPS has announced its partnership with Overstock.com. Both companies are launching a pilot program. The customers can have product returns picked up at home without reboxing the product through the pilot program. The pilot program will help both companies better understand customer preferences and evaluate their end-to-end shopping experience.
July 2022: CCR Logistics Systems Company has acquired RENE AG, a German service company for compliance solutions in the field of recycling management. This acquisition is a strategic step to further expand its leading role as a comprehensive provider of global compliance solutions.
