Warehousing demand could increase as e-commerce companies target same-day delivery
Demand for small warehouses within city limits is expected to increase over the next year as e-commerce companies aim to ensure same-day delivery of food and groceries to customers, according to a report.
The demand will likely be for warehouses between 5,000 and 10,000 square feet, real estate consultant Colliers International said.
“E-commerce companies are focusing on same-day delivery, with lockdowns influenced by the pandemic making more reliance on e-commerce for food and groceries,” the report said.
The consultant said e-commerce companies are now trying to store a greater proportion of their inventory closer to their customers’ locations for greater efficiency and to improve the quality of products on delivery.
“Over the next 12 months, we believe that urban warehouses will gain traction and serve as small distribution centers. like Mumbai, Bengaluru and Chennai and the NCR, ”the report says.
Even the oldest and least used ground floor office spaces and service centers are being considered for setting up small warehouses.
Anarock President Anuj Puri said e-commerce was flourishing in India even before Covid-19, and shopping center closures and closures have accelerated this growth.
Recognizing the potential of online sales, he said many companies are now taking omnichannel business models seriously and are scrambling for additional warehouse capacity in all cities.
“In terms of new trends, multi-level warehouses within city limits may experience higher demand,” Puri said.
Currently, warehouses in major Indian cities are largely limited to the outskirts, quite far from a larger clientele.
Warehouses in the city will help businesses minimize transportation costs and run faster delivery times, the key to success for many businesses in today’s competitive era, Puri said.
E-commerce companies and third-party logistics are the main drivers of warehouse demand in the country.
According to Anarock, $ 2 billion of PE investments came in the warehousing, industrial and logistics sector (2017-Q1 2020). Nearly $ 7 billion worth of platforms have been created for warehousing since 2015.
Sachin Chhabra, founder of Mumbai-based start-up Peel-Works, specializing in B2B grocery e-commerce, said, “With B2B processing moving towards just-in-time service levels, the proximity to warehouses for businesses like ours are helping corner stores free up space and working capital.
“This additional space will be added as a showcase allowing the store to increase its assortment and modernize. The reduction in working capital will allow the retailer to compete with e-commerce and organized retail both on the assortment and prices, ”added Chhabra.Press Trust India