While globally, top e-commerce players have taken different approaches to logistics, the trend is tilting towards investing in one\u2019s own captive arm to control the customer experience. Consider this: Alibaba Group has invested in a smart supply chain and advanced logistics for its \u2018new retail\u2019 initiative and is strengthening its logistics arm Cainiao for the same. Its arch rival JD.com\u2019s logistics arm has raised $2.5 billion to invest in automation drones and robotics. In fact, Alibaba has invested nearly $2 billion in Indian companies ranging from e-tail to express delivery companies, which will enable it to build its own logistics network. Even Amazon.com is said to have launched a delivery service \u2014 shipping with Amazon \u2014 for an end-to-end shipping solution. Increasingly, e-comm players are seeing value in controlling the last mile and a similar trend is visible in India too. A majority of shipments (more than 75%) on both Flipkart and Amazon.in are managed by their respective logistics arms Ekart and ATS. Focus on scale With tier II and III cities accounting for almost half the orders, finding a logistics partner with reach, CoD facility and timely remittance at an affordable price is key. For example, for last mile delivery, Amazon India has four different models along with third-party logistics (3PL) partners such as Blue Dart, India Post, etc. It has 150 delivery stations which are managed by Amazon, 350 service partner stations, and 17,500 partner stores under the \u2018I Have Space\u2019 programme. \u201cScale and technology advancement are two key levers influencing e-tailers\u2019 decisions to invest in their in-house logistics arms,\u201d says Jaideep Ghosh, partner and head \u2014 transport, leisure and sports, KPMG India. This has been witnessed in cases of leading e-tailers in the US as well as China. Threat to 3PLs? According to a RedSeer report, the share of 3PLs in overall e-commerce shipments is expected to fall to 40% in 2020 from 43% in 2017. But experts say that the rise in demand from tier II cities and beyond is expected to account for almost half of the total demand by 2022. There is a large opportunity in the long tail for 3PL. \u201cFlipkart and Amazon together account for 75% of the market but there is 25% of the market where 3PLs play a big role,\u201d says Ujjwal Chaudhry, engagement manager, RedSeer. In fact, 3PLs\u2019 differentiator is their reach. For example, Ecom Express covers 25,000 pin codes and 20 states in the country are fully served, with a further 2,500 delivery centres to cater to rural areas. \u201cSo far, we focus only on e-commerce players but we are not glued to them. We are looking at B2B players also for their warehousing requirements,\u201d says TA Krishnan, CEO and co-founder, Ecom Express. The top e-commerce players have a fixed installed capacity and may not be able to go beyond the core catchment area \u2014 which could be the top 50 or 100 cities. \u201cThat is where 80-90% of their volume is. For the balance 10%, they may not have enough density to have their own set-up,\u201d Krishnan says. Therein lies the need for 3PLs. The rise of online grocery has further given boost to 3PLs. Shadowfax works with major e-tailers such as Flipkart, Amazon and BigBasket with offerings such as less than 90-minute delivery in more than 100 cities. \u201cFor the hyperlocal space, e-commerce players prefer to outsource,\u201d says Abhishek Bansal,\u00a0 co-founder and CEO, Shadowfax. Another leading service provider DHL Express covers more than 11,000 pin codes and over 33,000 locations within India. \u201cWhile major e-tailers work with a combination of their own network, we are still at a very early stage of the e-commerce market development. There is room for all,\u201d RS Subramanian, country manager, DHL Express India, sums up.