The warehousing sector in India: A perspective on its growth and future

While it’s a fact that the Covid-19 pandemic has resulted in upending every sector in the country, however, forward is the only way through. It is anticipated that various evolving technologies such as artificial intelligence (AI), machine learning (ML) and Internet of Things (IoT), among others will play a key role in bringing about tremendous change in every sector, including the warehousing industry.

Efficiency is the name of the game, as every sector is under constant pressure to achieve more with less. In the past two years, the industrial and warehousing sectors have seen tremendous expansion across the country and at the global level.

According to industry estimates, global warehousing space will double to 200m sq ft by 2022. In the Indian context, given the rapid rise of e-commerce across the country, demand for storage spaces has increased in tier-I and tier-II cities, which is expected to drive real estate growth, notably in the markets of Delhi-NCR, Mumbai, Chennai. Pune and Bengaluru.

A strategically-located and well-planned warehouse, in most cases, not only improves the customer experience but also provides a competitive edge through supply chain economics. However, the industry is still facing some challenges that the government needs to address for the speedy growth of the warehousing sector. 

The most difficult aspect of the storage company is acquiring land. Land location in industrial and logistics parks is critical since it suits the clients' business demands. The next biggest challenge is as more people shop online, retailers' footprints are diminishing. To compensate for the move from brick-and-mortar to e-commerce, warehouses will have to face a greater storage burden. This equates to a higher personnel requirement, which is exacerbated by tight labour markets.

The road ahead

There is a need for increased interconnectivity and real-time data collection. Future warehousing and supply chain systems will be everything but obfuscated. Transparency and accessibility must be the foundations of warehouses and supply-chain systems.

Technological advancements have given us the ability to communicate information quickly and securely, resulting in efficient and transparent real-time data interchange for warehouses.

Warehouse Mobility Solutions is another factor that defines the future of warehouses. Smartphones are not only giving freedom to warehouse administrators from field activities but also raising capabilities to standard workstations. Today's warehouse mobile solutions can provide warehouse managers with the operational efficiency and processing power they require. It can also help to maintain peace of mind in relationships between warehouse management and personnel. When management teams and their warehouse employees are not working in the same place, communication can be tough. As a result, employee productivity may deteriorate.

There are more trends that are shaping the future of the warehousing industry in the country like the popularity of drop shipping will skyrocket. Retailers, manufacturers, and distributors will continue to see their fulfillment processes influenced by e-commerce and direct-to-consumer growth.

In the coming years, the warehousing sector may see a shift in trends. As taxes have been reorganized across the country, and the Input Tax Credit (ITC) is now available across all product and service lines, outsourcing logistical activity is the next logical step for most sectors. The warehousing sector will undergo a significant evolutionary shift.

Massive service upgrades by large, modern technology-based warehousing operators could potentially become a trend. The warehousing industry is maturing, and even newer developers have begun to include quality criteria and infrastructure as a regular offering.

The author is Priya Saini, Senior Media Relations Executive. Starting her public relations journey from working on Microsoft to handling media accounts of Reliance Group, she has a successful track record of around 2 years. Her core strength lies in her extensive knowledge of media plus advocacy and her strong network with various dignitaries in media.

Leveraging from her experience of exploring media opportunities and collaborating with trade associations like FICCI, CII, Assocham, etc, she played an instrumental role in the establishment of many brands dealing in real estate, education, automobiles, market, energy, and technology sector.

Ms. Saini has a MA in Mass Communication from Guru Jambeshwar University, Haryana. Along with this, she has a Post Graduation in English Journalism from the Indian Institute of Mass Communication and a BA degree from the University of Delhi.