Small warehouses in demand as e-commerce assures same-day deliveries to consumers

E-commerce companies are working towards to ensure same-day deliveries to consumers, and as such, the demand for small warehouses are set to rise over the next year. Amazon Pantry, Grofers, Milkasket, Bigbasket are some of the players who have been doing extremely well and have seen the COVID19 led lockdown propelling adoption and consumers relying on e-commerce for day to day supplies and deliveries.




Anarock Chairman Anuj Puri said e-commerce was flourishing in India even before COVID19 pandemic, and lockdowns and closure of malls have only accelerated this growth. He said many businesses are now taking omnichannel business models seriously and scrambling for additional warehouse capacity across cities. Puri pointed out that multi-level warehouses within city limits could see higher demand. “In-city warehouses will help companies to minimise transportation costs and execute faster delivery timelines, the key to success for many businesses in today’s competitive era,” he said.

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Sachin Chhabra, the Founder of Peel-Works, which is into B2B grocery e-commerce business, explained that proximity to warehouses for companies helps corner stores free up their space and working capital. “This additional space will get added as a storefront enabling the store to increase its assortment and modernise itself,” Chhabra said. “The reduction in working capital will allow the retailer to compete with e-commerce and organised retail on both assortment and prices.”

According to Colliers International, property consultant, the demand is likely to be for warehousing of 5,000 to 10,000 sq feet size. The consultant said e-commerce companies are now trying to stock a larger proportion of inventory closer to their customers’ locations for efficiency and to improve the quality of products upon delivery. “Over the next 12 months, we believe in-city warehouses will gain traction, to be used as small distribution hubs. We expect occupier to scout for in-city warehousing space in the range of 5,000-10,000 sq ft in major demand hubs such as Mumbai, Bengaluru and Chennai and the NCR,” the report said.