A massive rise in demand for warehousing spaces from e-commerce companies such as Amazon, Flipkart and JioMart has led to a unique situation in India, where now malls, marriage halls, auditoriums and other similar spots that shut during the COVID-19 pandemic are being converted and used for storage, according to a report by Mint.

Last July, Amazon increased its warehousing space in the country by nearly 20 percent, the report said. The company now has 60 fulfilment centres, across 15 states, and “receive centres” for collecting products from sellers on its platform.

The report quoted industry players as saying demand for warehousing facilities was maximum from e-commerce players focused on same or next-day deliveries.

Also, grocery players focussed on express delivery were using spare real estate like malls or their own retail stores as dark warehouses.

Last month, Reliance Retail announced that it would build its own supply chain and for that it would convert its Reliance Market stores into fulfilment centres. This, Reliance Retail, said was a step towards expanding the reach of JioMart, its new investment in the commerce space.

Reliance Retail, a subsidiary of Reliance Industries, on January 22, said: “To enable new commerce expansion across cities, Reliance Market stores transitioned into fulfilment centres.”

The COVID-19 pandemic is said to be a major factor behind the increasing demand for warehousing and new strategies by e-commerce platforms to streamline their delivery system. And that's only possible if the storage facilities are not just increased but also made available at as many spots as possible.

Abhijit Verma, executive director and chief executive officer, Avigna Space, a warehousing and logistics firm, agrees. “Prior to the pandemic, e-commerce and third-party logistic companies had an equal share in the demand for warehouses. But post-pandemic, e-commerce has taken a major share of nearly 45-50 per cent of warehouse demand,” Mint quoted Abhijit as saying.

A marked shift to e-commerce platforms due to lockdown further facilitated by online payments has also encouraged such players to invest and look for more warehousing and logistical support. The industry could absorb close to 35 million sq. ft this year, says real estate research and advisory firm Jones Lang LaSalle.

“When it comes to cold chain demand, with grocery players switching to e-commerces, there is an increased need, along with the rising e-pharma cold chain needs,” Anshul Singhal, managing director, Welspun One Logistics Parks, told Mint.

Despite a massive increase in demand for warehousing and logistical support, India still lacks these facilities by a huge margin if a February 2021 report by real estate consultant Savills India is to go by.

The report underlined the country needed at least 70,000 integrated packhouses to store and process fruits and vegetables before distribution. India's current capacity is just 250. While the country needed 62,000 reefer trucks, it has less than 10,000. The ripening chambers, too, fall short of the required 9,000 against the existing 800.

First Published:Mar 5, 2021 10:54 AM IST