Warehousing and storage is going to be big business post lockdown
The post pandemic markets will transform. Businesses models might have to change the way they run. This could also mean, that the whole method in which storage and warehousing has been functioning may also have to evolve. Indeed, India is betting on (big) warehousing and storage post pandemic.
The whole process started in February. The first ones to enter the battleground were aggregators. They had to quickly improvise to ensure their customer was not left dissatisfied. As the government allowed e-commerce aggregators to continue deliveries of essential items of use, many learnt a lesson into storage.
The redefining process of how business has to be stored and then delivered has already started. In some Indian states, the lowdown induced lull might stretch for a longer duration. A lot of warehousing facilities are thriving on e-commerce deliverables. As soon as the lockdown opens, backlog of orders would demand speedy deliveries.
This is an opportune moment for real estate to invest in warehousing facilities. There is potential for bringing in tech-enabled multistory warehousing facilities which are already a popular option in South Asian countries such as Hong Kong, Singapore, South Korea and Tokyo.
Up until now, warehousing had been primarily concentrated in Tier I cities, but with ecommerce penetration into smaller cities, the possibility of warehousing facilities look very promising in Tier II cities as well.
Aggregators are using warehousing facilities to stock up, to be able to deliver well in time. The spill over for e-commerce is going to continue through the end of the year. There is no denying that the economy has been pushed back literally be one year since the lockdown in February 2020.
Additionally, the post pandemic future has left the retail sector very uncertain of its future. There is no surprise that major India and International retail players invested here, may now need multi-level warehouses within city limits to service cities.
Having multi-storey warehousing is a good planned strategy that can help companies reduce transportation costs and improve delivery time. It will also help optimize overall operational and occupancy costs.
Going ahead, India may see a lot of manufacturing business shift to its side. A lot of companies are already shifting manufacturing from China looking for alternate markets. There are more opportunities for warehousing and storage use here. Uttar Pradesh is one state where CM Yogi Adityanath has offered the best of best, for people to come and invest and set up shop in India. More states will follow as the Indian government has been smart enough to look at the lockdown situation as an apt opportunity to consolidate, restructure and grow the economy.