The warehousing industry in India is observing a tremendous growth in recent times. With transaction volumes almost doubling yearly, there is an all-around demand of warehousing space from different sectors including e-commerce, FMCG, and logistics companies.
A recent report by Knight Frank indicates an exponential rise in the warehousing leasing volume to almost 25.7 million sq ft, a whopping 85 per cent increase within a year!
The report also reveals some interesting findings regarding the growth of the warehousing industry like:
An increase in the demand by almost 100 per cent post GST (Goods & Services Tax) implementation.
A rapid growth in the requirement for large-sized warehousing spaces with the potential to make the sector organised.
A demand-based hike seen across sectors including e-commerce, retail manufacturing, FMCG, and more.
Factors Driving This Growth
So, what are the factors driving this change, you wonder?
Among the major ones contributing to the growth of warehousing sector in India include:
- Government Initiatives
This is one of the significant factors contributing to the growth of warehousing sector in India. The main initiatives taken by the government in this regard include:
The decision to grant infrastructure status to the logistics sector which includes cold chain and warehousing facilities. This is likely to attract credits at competitive rates.
Bringing a structure to logistics in the form of GST implementation that has generated the interest of prominent industry players. As a result, they are now willing to invest large amounts in creating huge warehousing spaces thereby giving a much-needed boost to the sector as a whole.
- Sector-specific Demand
Sectorial demand, especially from e-commerce, retail, automobiles, chemical, agriculture, and pharmaceutical sectors, has been one of the biggest driving factors for the phenomenal growth of the warehousing industry in India.
The year 2018 alone has seen some significant transactions in leasing warehousing space by some big names from e-commerce.
- Growth in Tier-II Cities
Owing to the trend of industrial growth moving to Tier-II locations from the peripheries of major metros, these cities are becoming the favourite destination as warehousing hubs for companies. Facilitating better storage and transportation facilities, this growth in Tier-II cities is another contributing factor to the rapid growth of the warehousing industry.
Additionally, the preference shift from average low-cost warehousing facilities to using organised services offered in the space is yet another factor contributing to this growth pattern.
- Technological Advancement
The role of technology in today's time cannot be over-emphasised enough. There is hardly any sector that is left untouched by technology and warehousing is no exception to this trend. The sector has seen some positive changes owing to warehouse-specific technological solutions available nowadays such as:
Voice & scanning technologies
Warehouse automation solutions
Warehouse management system (WMS) and more.
The result of these technologies is faster & smoother operations and efficient task force management by automating tasks thereby reducing the need for manual labour. Automation also reduces the need for operators and line managers thus dropping the manpower cost substantially.
The Way Ahead
Observing the pace with which associated industries are flourishing, the warehousing sector is only going to see an upward trend in the foreseeable future. The rapid growth of the e-commerce industry coupled with industry-specific initiatives such as the grant of infrastructure status further presents an excellent opportunity for large warehousing and other logistics infrastructure such as free trade warehousing spaces, specialised warehouses (privately-owned), cold storage, logistic parks etc. in the near future.
Ecom Express and its Fulfillment Services
Reaching more than 25,000 pin codes through over 2400 delivery centres, Ecom Express is a leading end-to-end technology enabled player in the Indian e-commerce logistics space. The company, with the launch of its largest warehousing facility, INDIA-1 in Bilaspur in late 2017, entered into the Fulfillment Services business - along with its existing logistics solutions for the industry. The state of the art facility spread across over 500,000 sq. ft. houses a Fulfilment Center, Pickup Processing Centre and a Hub.
Ecom Fulfilment Services includes a range of services such as Pick-up, Quality Check, serialization, put away, real time inventory management, order management (pick, pack and ship services) to customers who would like to use the services. Additionally, the service manages returns, invoicing and payment reconciliation. The guaranteed dispatch from Ecom Express provides added assurance of speed and reliability to the seller and buyer.
Apart from this, the Company has 17 other fulfillment centres spread in Delhi NCR, Bengaluru, Bhiwandi, Cochin, Guwahati, Hyderabad, Kolkata, Lucknow, Patna, Zirakhpur, Jaipur and Chennai.
This is in line with the Company's core USP of offering end-to-end logistics solutions while being the single point of contact for multiple services provided to e-commerce players.
Ecom Express continues to meet the increasing logistics and warehousing demand of the industry and in a direction to build a robust and responsive eco-system empowering the Industry.