Saturday 13 February 2021

Growing Indian warehousing market

The Indian Warehousing Market is expected to be an estimated $12.2 billion in 2020, growing to $19.5 billion by 2025.

The warehousing market is driven by the country's flourishing manufacturing, retail, FMCG and logistics sectors. Furthermore, supportive government policies such as establishment of logistic parks and free trade warehouse zones is expected to spur the market growth through 2025. Also, introduction of GST has led to reduction in inventory and turnaround time, which has led to the removal of check points thereby diminishing state boundaries.

Besides, technological advancements such as advent of AI, IoT, 3D Printing, among others, in the warehousing industry is further expected to create lucrative opportunities over the next few years. Moreover, the emergence of third part logistics and supergrid logistics is further expected to fuel the market growth during the forecast period.

Further, the sudden outbreak and spread of COVID-19 will have short-term impact on warehousing demand due to lockdown and reduced manufacturing activities. Further, it will help in strengthening the warehousing industry in India on account of the shifting consumer preference from offline mode of shopping to online in order to adhere to the social distancing norms.

The Indian Warehousing Market is segmented based on type, ownership, sector, usage pattern, infrastructure, end-user industry, company and region. Based on type, the market can be segmented into general, specialty and refrigerated. The refrigerated segment is expected to witness significant growth owing to the rising demand for such warehouses for storing perishable food items and ensuring food security & safety. Based on ownership, the market can be categorized into public, private and bonded. The public ownership segment is expected to dominate the market during the forecast period. These warehouses are owned by government and semi-government agencies and are rented by them. Such warehouses aid the small traders who don't have their own warehouses.

Based on usage pattern, the market can be split into single and co-warehousing segments. The co-warehousing segment is expected to witness significant growth in the market through 2025. This can be ascribed to the increasing demand for last mile distribution and growing preference for co-warehousing among manufacturers, suppliers, logistic companies as well as startups. Additionally, co-warehousing provides flexible storage that can help businesses meet their needs and give them a better control over their budgets. Co-warehousing provides scalability and helps in reducing overall operational costs.