Warehousing Attracts Interest from E-Commerce Players after COVID-19 Impact

Pre Covid-19

The warehousing sector had been on a strong growth trajectory with high demand growth of 87% in 2017 and 77% in 2018. The trend of strong warehouse demand continued well in 2019 and initial part of 2020.

Post Covid-19

As per the market reports the absorption of warehousing spaces in 2019 was 37 million Sq. Ft. as compared to 32 million Sq. Ft. in the year 2018 , 2020 was projected to have 40 million Sq. Ft.

But due to covid-19 pandemic it is now being projected as 30million Sq. Ft. i.e. 20% decrease in the absorption of the spaces .Out of this total absorption in 2019 3PL Industries has the highest absorption close to 45% , whereas ecommerce players consumed 18% and retails consumes 11% , rest was attributed to the pharma , FMCG and other companies .

Indian warehousing sector has witnessed the huge investment of 254 billion rupees since 2017 and estimated to achieve 495 billion rupees.

However, after the Covid19 the positive impact on the warehousing segment will proceed into the direction of e-commerce, pharma, FMCG etc. Which eventually related to the day-to-day requirement of the public. Moreover, the technological and internet usage increased in the daily life of the people in the country also make E-commerce to the job for daily services like groceries and essential needs.

E-Commerce as a Key Player :

Since COVID-19 struck the market early March 2020 with consequent nationwide lockdown, there has been a standstill in overall demand activity, however, a sharp rise in enquiries from the e-commerce segment," will Re-build the culture of warehousing in the country .

There has been a sharp rise in enquiries from the e-commerce segment since COVID-19 struck and the subsequent nationwide lockdown in the country, This response has resulted in the demand for setting up distribution centres in the cities, Warehousing segment was one of the segments of the real estate sector that was likely to benefit from the COVID-19 outbreak and a post-COVID-19 world, and as supply chains were clogged, a lot of players were asking for spaces across the country.

"There is a possibility of unsold / idle inventory, old manufacturing units, shopping centres being converted into warehousing space."

"Ecommerce is one thing, which is actually rolling the ball in these scenarios."

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