INDIA WAREHOUSING MARKET
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 .
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.
The major segments represent in warehousing industry:
- 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 –
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.
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.
- Hindrani Group
- Indospace AS Industrial park pvt.ltd
- Grofers India pvt.ltd
- Embassy Group
- Container Corporation of India Ltd.
- Gati Ltd.
- Mahindra Logistics Ltd.
- Transport Corporation of India Ltd.
- Central Warehousing Corporation
- DHL Express (India) Pvt. Ltd.
- Jayem Warehousing Pvt. Ltd.
- JICS Logistics Ltd.
- Shalimar Warehousing Corporation
- Spear Logistics Pvt. Ltd.
THIS REPORT WILL ANSWER THE FOLLOWING QUESTION
- Overview of India Warehousing market.
- COVID impact on India warehousing market.
- Growth strategy of warehousing market and opportunity in warehousing market.
- Market Size and Forecast of warehousing market.
- The investment prospect of Indian warehousing market.
- Impact of GST on warehousing market.
- Important distributors of warehousing market India
- The competition over coming growing strategies of Indian warehousing market.
|2||Scope of the report|
|7||Insights from Industry stakeholders|
|8||Cost breakdown of Product by sub-components and average profit margin|
|9||Disruptive innovation in the Industry|
|10||Technology trends in the Industry|
|11||Consumer trends in the industry|
|12||Recent Production Milestones|
|13||Component Manufacturing in US, EU and China|
|14||COVID-19 impact on overall market|
|15||COVID-19 impact on Production of components|
|16||COVID-19 impact on Point of sale|
|17||Market Segmentation, Dynamics and Forecast by Geography, 2020-2025|
|18||Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025|
|19||Market Segmentation, Dynamics and Forecast by Application, 2020-2025|
|20||Market Segmentation, Dynamics and Forecast by End use, 2020-2025|
|21||Product installation rate by OEM, 2020|
|22||Incline/Decline in Average B-2-B selling price in past 5 years|
|23||Competition from substitute products|
|24||Gross margin and average profitability of suppliers|
|25||New product development in past 12 months|
|26||M&A in past 12 months|
|27||Growth strategy of leading players|
|28||Market share of vendors, 2020|
|30||Unmet needs and opportunity for new suppliers|