Page 6 - ITLN May - June 2022 issue

Cover Story
Warehousing

India’s warehousing

sector checks into the

fast lane

Buoyed by the e-commerce
sector and the growth of the
Indian industry, warehousing
in India has undergone
a metamorphosis. With
technological advancements,
consolidation, government
support, newer business
models, and investment
coming into the space post
the pandemic, the sector may
well be set for a dream run has only managed to accelerate the
pace of development, investments,
for the next five years. and technological advancement in
the warehousing sector. However,
Lakshmi Ajay
Covid-19 and the resulting global
supply chain crisis and fuel prices
arehousing is a crucial which impacted industries across the
part of the supply chain world have also caused a significant
for businesses that are shift in construction costs, resulting
Wengaged in manufacturing, in slightly higher material costs and
import, export, and transportation of supply chain disruptions leading to an
physical goods. From being mere holding increase in costs.
places of stock or low-grade godowns, The pandemic and the ensuing
warehouses have metamorphed into Everyone is moving e-commerce wave which made
smart buildings replete with insulation, to the D2C model consumers move towards online
ventilation, climate-proofing, surveillance and to facilitate shopping from discretionary to
and standard safety procedures, quick deliveries, on- essentials ensured that warehousing
and IT infrastructure. demand warehousing and logistics emerged as the most
From a largely unorganised, asset- preferred real estate asset class for
heavy industry, warehousing has is a must. To facilitate institutional investors who chose them
also undergone an evolution in India, the consumers on over commercial office segments that
especially after a multitude of factors time or rather before were traditionally more favoured.
like the expansion of pharmaceutical, time, everyone has Up until 2020, the warehousing
e-commerce, and manufacturing sectors. started adopting micro market in India was valued at Rs 1050
Some growth can also be attributed to warehousing models too. billion in 2020. The segment reportedly
favourable government policies in recent attracted an all-time high of $743
years and an increase in the spate of Harshad Vagdoda million (more than Rs 5,500 crore) in
institutional investments. Vinculum Group investments, accounting for more than
However, the unavailability of land, As the industry expands, its half of the $1.36 billion attracted during
the high acquisition cost for land, growth is also set to be propelled the second quarter of 2021.
and the lack of adequate warehouse by technological advancements like
infrastructure in the country are some automation, robotics, and digitisation. By The Numbers
drawbacks apart from the perennial Incidentally, the Coronavirus Global property consultancy Knight
power shortage crisis in India. pandemic which broke out in 2020 Frank India in their India Warehousing
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