Delhivery Limited

Page 1 of 7 COMPETITION COMMISSION OF INDIA Combination Registration No. C-2025/04/1274 17th June 2025 Notice under Section 6(2) of the Competition Act, 2002 given by Delhivery Limited CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Order under Section 31(1) of the Competition Act, 2002 1. On 17th April 2025, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by Delhivery Limited (Delhivery/Acquirer). The Notice was filed pursuant to the execution of Share Purchase Agreement dated 5th April 2025 (SPA) among Delhivery, Ecom Express Limited (Ecom/Target) and Sellers viz., Eaglebay Investment Ltd., British International Investment PLC, and PG Esmeralda Pte. Ltd. [hereinafter, Delhivery and Ecom are collectively referred to as the ‘Parties’] 2. The Notice relates to Delhivery’s proposed acquisition of at least 99.44% and up to 100% of the equity and preference shareholding (on a fully diluted basis) of Ecom (Proposed Combination). 3. In terms of Regulation 14 of the Combination Regulations, the Acquirer was required to provide certain information(s)/clarification(s) relating to the Proposed Combination vide Combination Registration No. C-2025/04/1274 Page 2 of 7 letter dated 1st May 2025 (RFI). The response to RFI was filed by the Acquirer on 13th May 2025, followed by additional submissions on 2nd June 2025 and 9th June 2025. Parties 4. Delhivery, a publicly listed Indian company, is an integrated logistics player and provides a full-range of logistics services, including express parcel delivery, heavy goods delivery, full truckload freight, part-truckload freight, warehousing and supply chain services (including supply chain software solutions and value-added services) and cross border express services. Further, as submitted, Delhivery operates through a network of domestic and global partners and has made investments in automation, self- developed logistics technology and data intelligence capabilities. 5. Ecom is incorporated in India and is an unlisted public company. It is engaged in provision of logistics solutions to the Indian e-commerce industry and, as submitted, uses automated solutions to enable pickup, processing, network operation, delivery, reverse logistics and returns management and other related services, and also offers storage and warehousing solutions. Competition Assessment 6. The Proposed Combination relates to the ‘logistics sector’. The logistics industry broadly consists of transportation of goods, warehousing services and other supply chain services provided by logistics service providers primarily to businesses. Primary modes of transport used to facilitate movement of goods can be broadly categorised into road, rail, air and shipping. Warehousing and other supply chain services include the storage, handling, and management of goods. Logistics solutions can be classified in two broad segments viz., (i) express parcel delivery services and (ii) warehousing and supply chain services. Combination Registration No. C-2025/04/1274 Page 3 of 7 7. Express parcel delivery services can be further sub-segmented into (a) E-commerce express parcel services, (b) Traditional courier services, and (c) Hyperlocal shipments. E-commerce express parcel services include shipments by e-commerce players and new age and/or traditional brands selling directly to consumers digitally, formalized social commerce and reverse shipments [Third party (3P) E-commerce express parcel delivery services]. Traditional courier services include shipment of documents (legal papers, business contracts, banking documents, personal paperwork, etc.) and non- document shipments arising from customer to customer (C2C) and business to customer (B2C) transactions, including deliveries by government entities, SME merchants, and brands for offline orders. Hyperlocal shipments include all deliveries of goods within a small geographical area, i.e., quick commerce (which includes groceries, electronics, clothing, etc.), food deliveries and slotted deliveries. 8. Warehousing and supply chain services comprise warehousing and storage facilities for various types of goods, such as general merchandise, refrigerated goods, etc. Supply chain solutions include other services such as supply chain software solutions, direct-to- consumer fulfilment solutions that are required by businesses to manage their distribution channels. 9. In the aforesaid backdrop of range of logistics services, considering the presence of the Parties, it is noted that the Parties exhibit horizontal overlaps in both broad segments of logistics solutions viz., express parcel delivery services and warehousing and supply chain services. The overlaps in express parcel delivery services can be further narrowed down to the segments of Third Party (3P) E-commerce express parcel delivery services and traditional courier services. As regards the scope of geographic operational dynamics of the aforesaid product segments, the Commission observed that, at broader level, the same can be considered as pan-India and can be narrowed down to Metros, Tier -1 and Tier 2+ cities separately. Combination Registration No. C-2025/04/1274 Page 4 of 7 10. The Commission accordingly assessed the Proposed Combination considering all plausible relevant market segments and decided to leave the delineation of the relevant market open, as the Proposed Combination, for the reasons detailed in the ensuing paragraphs, is not likely to cause an appreciable adverse effect on competition (AAEC) in any of the plausible relevant markets that could be delineated. 11. As regards the market segment of 3P E-commerce express parcel delivery services, the Commission considered the presence of the Parties excluding captive volumes. The Commission observed that at the pan-India level, the combined market share of the Parties, for FY 2025, in the said segment is [35-40] % in terms of volume, with an increment of [10-15]%. The combined market share of the Parties, in terms of volume, in the tier-wise levels of Metros, Tier 1, and Tier 2+ are [35-40] %, [25-30] % and [35- 40] %, respectively with increments of [10-15]% , [5-10]% and [15-20]%, respectively. 12. While the combined market shares of the Parties suggest a relatively significant presence of the Parties in the market, it is submitted that Ecom has been grappling with financial distress and operational inefficiencies and has been experiencing a significant decline in its business performance, largely driven by a decline in volumes from key customers and broader shifts in the competitive landscape 13. In this regard, the Parties submitted the yearly market share estimates for the period FY 2023 to FY 2025 and monthly market share estimates for the period March 2025 to May 2025. The Commission observed the trends in market shares for various market segments and noted that the market share of the Target in the narrowest market segment of 3P E-commerce express parcel delivery services has gone down from [20-25]% in FY 2023 to [10-15]% in FY 2025 at pan India level and from [15-20]% in Metros and Tier 1 cities in FY 2023 to [10-15]% in Metros and [5-10]% in Tier 1 cities in FY 2025. The corresponding market share in Tier 2+ cities has gone down from [20-25]% in FY 2023 to [15-20]% in FY 2025. The trend has become more pronounced in the latter half of FY 2025 with decline in average daily shipping volumes ranging from more than 20% Combination Registration No. C-2025/04/1274 Page 5 of 7 to more than 80% on a month-to-month basis over the period from March 2025 to June 2025. As observed, the impact of decline in volumes is also reflected in the financials and operational situation of Ecom. As submitted, Ecom has begun closing more than 1,000 delivery centres and 20 major hubs. 14. Thus, on an overall basis, the Commission notes that the estimates of market shares of the Parties are not reflective of the true picture of competition and operational dynamics of the 3P E-commerce express parcel delivery services market segment and considered the same accordingly in assessment. 15. Apart from the specificities noted above, the Commission also considered the aspect of countervailing buyer power viz. multi-sourcing and switching, in the 3P E-commerce express parcel delivery services market segment. In this regard, it has been submitted by the Acquirer that customers avail their services on a non-exclusive basis. The customer contracts are typically for a short duration and the contracts provide for termination for convenience. Additionally, the contracts do not have any minimum volume guarantees. In the absence of a minimum guarantee, customers can stop giving volumes to the Acquirer and give volumes to other players (owing to the prevalence of multi-homing) and the Acquirer would have no recourse in such a situation. The Commission in an earlier matter, i.e. Shadowfax/NewQuest1 had inter alia, noted that the players in the 3PL services market (which includes express parcel delivery services) face high countervailing buyer power and cited high customer concentration, simultaneous multiple tie-ups of e-commerce platforms with 3P logistics service providers, dynamic allocation from the platforms and very flexible and instantaneous switching as the reasons. 16. Thus, on an overall basis, while the combined market shares till FY 2025 continue to be on a higher side, basis the operational dynamics of the Target and countervailing buyer power with the customers, it appears that the Proposed Combination is not likely to