In India, direct-to-consumer (D2C) startups are increasingly adopting artificial intelligence (AI) to tackle last-mile delivery challenges, especially in Tier-II and smaller cities emerging as key e-commerce growth markets. AI-driven solutions have improved delivery success rates by 11%, according to Velocity Shipping, through tools like automated order verification and customer payment prompts. Co-founder Abhiroop Medhekar emphasizes that logistics inefficiencies can drastically affect profitability. While demand in non-metro regions rises, issues like unclear addresses and high cash-on-delivery (COD) rates lead to significant revenue losses, especially during festive seasons when RTO shipments can reach up to 30%. Strategic AI interventions can enhance delivery outcomes, as data shows only 60% of shipments succeed in these areas. With India’s e-commerce market projected to surge from $70–80 billion in 2024 to $180–200 billion by 2030, AI-driven logistics will be crucial for sustainable D2C growth in the expanding non-metro landscape.
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