India Warehousing Market 2020-2025

October 21, 2020
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INDIA WAREHOUSING MARKET

 

INTRODUCTION

 

In India warehouses become a segment of rapidly growing logistic industry. Today warehouses do not just provide confinement of goods but also serve various services such as: packaging, sorting, blending, and processing. The initiative had been taken by government as set up of FTWZs (Free trade warehouse zone) under the Warehousing Act 2007 to promote and growth of  India Warehousing market .

 

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Nearly 60% of the modern warehouses are residing in six cities namely Mumbai, NCR, Chennai, Pune, Bangalore, Ahmedabad, Kolkata and Hyderabad  are the major warehousing markets.

Current land reserved for India warehousing purpose – 21,163 acre.

Estimation- 63% have potential to be added more supply.

 

MARKET SEGMENT

The major segments represent in warehousing industry:

  • Industrial/Retail
  • Agriculture
  • Cfs/Icd
  • Cold Storage
  • Government Storage

 

Out of all major segments, Agriculture warehousing has witness the highest growth rate of 17.87% of total revenue since 2019. The agricultural warehousing market valued at INR 145.82 billion and is expected to reach INR 365.75 billion in coming years.

Today India has total agricultural warehousing capacity of 91 million metric tonnes and majority own by state agencies. The need of storage of food and vegetables in agricultural warehousing is constantly growing.

 

Currently, India’s total warehousing capacity is estimated to be 160 Mn tonnes [Approximately  30% of this capacity managed by private sector] and rest managed by public sector [CWC (Central warehousing corporation), SWC (state warehousing corporation), FCI (food corporation of India), state agencies and co-operative sector].

 

In recent times, the rapid growth in the e-commerce industry is fueling the demand as well as the development of the logistics and warehousing sector of the country. In tier-1 and tier-2 cities e-commerce retailers has aggressively looking forward to opening up warehouses as well as collaborating with well-known logistics service providers across the country to be able to maintain a minimal delivery cost.

 

In 2018, the annual transaction of warehouses space in Kolkata reached 4.7 mn square feet from 1.6 mn square feet in 2017, the massive growth rate of 191% in total leasing.

 

 

COVID IMPACT ON WAREHOUSING MARKET

 

During the pandemic, the e-commerce industry has witnessed a significant shift, with e-commerce players witnessing a steep rise in order volumes.

To regale this growing online consumer demand, e-commerce players are looking to strengthen their supply chain and logistics capabilities.

Three of the eight markets rank high with the effect of COVID-19 growth percent –

Hyderabad (2.19)

Ahmedabad (2.09)

Chennai (2.02).

 

Demand in leasing activity [FY2020]-

Mumbai (8% YoY)

Pune (42% YoY)

Ahmedabad (5% YoY)

There’s a shift in manufacturing sector is to be seen in India after the chinese products import banned by government after the India-china LAC war.

 

 

INDIA  WAREHOUSING MARKET DYNAMICS

 

Indian e-commerce sector is expected to drive the demand for organized player in pharmaceutical and chemical industry, 3PLs, auto and auto ancillaries, FMCG, retail in the warehousing market of India.

The existing trend is be on cashing of the economy, there’s has been an increase in automobile industry sharped seen in the country. International trade is keep on increasing and strengthening the growth of India warehousing market.

 

Technological advancement has take place such as 3D Printing, AI, IoT, among others in the India warehousing market is further expected to create lucrative opportunities over the next few years.

 

INVESTMENT IN WAREHOUSING INDUSTRY

 

The warehousing sector has captivate  interest from multiple large institutional investors, with inflow of 3.7 billion USD since 2017. In H1 of 2020 the sector accumulated a considerable 17% total private equity real estate investment.

 

This sector’s share of total private equity real estate investment in India is keep on increasing [year-on-year]. During 2019-2020, the industrial and warehousing segment collected the third highest share of private equity investments after office and retail.

 

After implementation of Goods and service tax in country, the asset class has collected institutional investment commitments of 6.5 billion USD.

 

The investment accumulation are as follow:

Year 2016- 125 million USD

Year 2017- 2.3 billion USD

Year 2018-  2.2 billion USD

Year 2019- 1.8 billion USD respectively.

 

MARKET SIZE AND FORECAST

The total warehousing space estimated at 739 million sq. ft in the year 2019 for the manufacturing sector, is projected to grow at a compounded annual growth rate (CAGR) of 5% in the next five years to 922 million sq. ft by the year 2024.

 

IMPACT OF GST

 

After the implementation of Goods and Services Tax (GST), there have been more organized players came into the fray of Indian warehousing market due to increasing demand.

 

As earlier the sector has largely controlled by unorganized players of market. GST is helping and more enabling companies to strategically plan their manufacturing and distribution locations.

 

This ultimately lead to consolidation of warehouses into bigger spaces and greater efficiency more among the modern firms. GST help companies in better inventory management. It is estimated that with the effect of GST the new era of logistic and warehousing market could see atleast 100% growth in coming years.

 

COMPETETIVE LANDSCAPE

 

There’s Bengaluru-based developer company Embassy Group, which has invested 100 million dollar and has committed to another 250 million dollar. This firm has leased out 3 million sq. ft and is constructing about 7 million more.

 

IndoSpace the India’s largest developer of industrial and warehousing parks, with 35 warehousin parks and 15 million sq. ft. In the current year,  IndoSpace  plans to build an additional 5 million sq. ft, backed by PE firm Everstone Group has invested over 3 billion dollar thus far.

 

This year [April 2019], the Hiranandani Group set up a new company, GreenBase corporation, which has entered into a joint venture with PE major Blackstone Group to build logistics and warehousing. This company has invested ₹500 crore in logistics and warehousing.

 

The Grofers company team, which has 26 warehouses has added 3 more in April when demand spiked, company will add five more over the next two weeks.

 

COMPANY PROFILES

  1. Hindrani Group
  2. Indospace AS Industrial park pvt.ltd
  3. Grofers India pvt.ltd
  4. Embassy Group
  5. Container Corporation of India Ltd.
  6. Gati Ltd.
  7. Mahindra Logistics Ltd.
  8. Transport Corporation of India Ltd.
  9. Central Warehousing Corporation
  10. DHL Express (India) Pvt. Ltd.
  11. Jayem Warehousing Pvt. Ltd.
  12. JICS Logistics Ltd.
  13. Shalimar Warehousing Corporation
  14. Spear Logistics Pvt. Ltd.

 

THIS REPORT WILL ANSWER THE FOLLOWING QUESTION

  1. Overview of India Warehousing market.
  2. COVID impact on India warehousing market.
  3. Growth strategy of warehousing market and opportunity in warehousing market.
  4. Market Size and Forecast of warehousing market.
  5. The investment prospect of Indian warehousing market.
  6. Impact of GST on warehousing market.
  7. Important distributors of warehousing market India
  8. The competition over coming growing strategies of Indian warehousing market.
Sl noTopic
1Market Segmentation
2Scope of the report
3Abbreviations
4Research Methodology
5Executive Summary
6Introduction
7Insights from Industry stakeholders
8Cost breakdown of Product by sub-components and average profit margin
9Disruptive innovation in the Industry
10Technology trends in the Industry
11Consumer trends in the industry
12Recent Production Milestones
13Component Manufacturing in US, EU and China
14COVID-19 impact on overall market
15COVID-19 impact on Production of components
16COVID-19 impact on Point of sale
17Market Segmentation, Dynamics and Forecast by Geography, 2020-2025
18Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025
19Market Segmentation, Dynamics and Forecast by Application, 2020-2025
20Market Segmentation, Dynamics and Forecast by End use, 2020-2025
21Product installation rate by OEM, 2020
22Incline/Decline in Average B-2-B selling price in past 5 years
23Competition from substitute products
24Gross margin and average profitability of suppliers
25New product development in past 12 months
26M&A in past 12 months
27Growth strategy of leading players
28Market share of vendors, 2020
29Company Profiles
30Unmet needs and opportunity for new suppliers
31Conclusion
32Appendix

 

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