Retail Sector’s Surging Impact on Indian Warehousing: CBRE


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    A recent report by CBRE highlights the growing significance of the retail sector as a key driver for warehousing demand in India. Over the last five years, retail’s contribution to the warehousing industry has surged, rising from 8 percent in 2019 to 13 percent in 2022, according to the study titled “The Three-mile Tale: Dissecting The New-age Retail Supply Chain Network.” In the first half of 2023, the retail segment’s share in the warehousing sector reached 9 percent.

    The CBRE report reveals that the collective demand for warehousing from e-commerce, FMCG (Fast-Moving Consumer Goods), and retail sectors accounted for nearly 27 percent of the total demand from 2019 to the first half of 2023.

    Within the retail category, hypermarkets claimed a significant share, accounting for 51 percent of the demand, followed by fashion and apparel companies at 32 percent.

    The report also anticipates further growth in the retail segment during the second half of 2023, driven by an expected increase in consumption during the festive season. Anshuman Magazine, Chairman and CEO of CBRE India, South East Asia, Middle East, and Africa, highlighted that evolving consumer preferences, technological advancements, complex trade dynamics, and stricter compliance regulations, including sustainability, are all contributing to the dynamism in the retail sector. Consequently, retail players are reevaluating their supply chains, leading to a heightened demand for warehouse leasing and advanced warehousing solutions.

    The report’s projections indicate significant growth in specific retail segments, with the fashion and apparel category expected to expand over 12 times by 2047, and the FMCG category projected to grow nearly six-fold by 2027. To accommodate this expansion, temperature-controlled storage facilities will be vital to maintain product quality. Additionally, the adoption of automated First-In-First-Out (FIFO) rotational methods within warehouses will play a crucial role in prioritizing the sale of older products and reducing wastage. The report also predicts a 1.5-fold growth in the consumer electronics category by 2027.

    Rami Kaushal, Managing Director of Consulting & Valuation Services for India, Middle East & Africa, emphasized that the surge in demand for retail warehouses has been driven by the booming Q-commerce sector, which focuses on quick delivery of food, goods, and services, as well as the increasing penetration of e-commerce, especially in tier 2 and 3 cities.

    In conclusion, the CBRE report underscores the evolving landscape of the Indian warehousing industry, with the retail sector emerging as a pivotal force driving demand for warehousing and supply chain solutions.

    Also read: India’s Grade-A Warehousing Space Surpasses 163 Million Sq Ft in H1 2023: CREDAI-CRE Matrix Report


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