Know-It-All: Why is In-City Warehousing in India Growing and What to Look Out For?
Post-pandemic, the e-commerce and logistics warehouse business has flourished in India. As a result, more and more business owners and entrepreneurs are looking for warehousing facilities to help streamline the supply chain. While traditionally, enterprises have opted for warehousing facilities located in remote areas that offer plenty of space at lower costs, recently, the tides have turned for warehousing management. In-city warehousing is becoming a mainstream option for businesses, including established MNCs and fledgling start-ups.
Continue reading to learn more about the in-city warehousing sector in India, why it is growing, and how you can leverage it to expand your business.
Market Potential
The e-commerce sector has witnessed massive growth in India over the last few years. For instance, the total share of e-commerce in the retail sector is expected to grow from 4% in 2021 to 8-10%2 by 2026. As a result, the in-city warehousing market has also seen an upward tick. A report1 by Colliers reiterated the same, stating that the industrial and warehousing demand in the top five Indian cities has risen by 17 per cent year-on-year (YoY). The report also suggested that in-city warehousing is likely to rise over the next year as businesses prioritise same-day delivery of goods and services.
Due to the ever-expanding nature of the e-commerce sector and increased dependence on online shopping and logistics service providers after the pandemic, the market for in-city warehousing is on an upward trajectory. Additionally, Q-commerce, valued at $2.8 billion3, is set to disrupt retail with a 40-45% CAGR. In Mumbai, Bangalore and Delhi NCR, Gen Zs and Millennials led the category with stronger instant purchase habits. Quick commerce has 1/3rd the transacting users of online food delivery companies and 1/4th of online mobility, with potential for growth due to consumer overlap.
Drivers of Expansion
In-city warehousing has grown over the last few years due to an increased reliance on e-commerce facilities, logistics companies and logistics service providers. After the lockdowns during the pandemic, consumers have become increasingly dependent on online shopping, food delivery companies and quick delivery services. Government initiatives like Digital India have also made paying for goods and services online easier.
E-commerce and Q-commerce businesses have also begun streamlining their supply chain and operations, offering incentives like same-day delivery, offers for quick returns and close order tracking to meet rising consumer demand. Businesses want logistics companies and logistics service providers to stock their products close to their customer base to ensure that the product’s quality is intact upon delivery, thereby ensuring efficient warehouse management. All these factors have culminated in a driving need for businesses to create distribution centres that are close to their customer bases in large urban areas. The solution? In-city warehousing and efficient logistics service provider for warehouse management system.
Trends & Innovations
Although the demand for in-city warehousing has been fairly recent for last-mile logistics, a few trends have emerged in the logistics warehouse sector. As of 2024, most businesses are looking for in-city warehouses that are sized at 5000-10,000 square feet. For third-party logistics service providers, older ground-level offices that have been under-utilised in the past are being revamped to set up small warehouses within cities. Since more and more businesses are adopting an omnichannel business model, i.e., using multiple modes of marketing and delivering products, the demand for warehousing capacities across cities has risen for last-mile logistics. Chances are that multi-level warehousing facilities will pop up across major cities at top logistics parks in India.
Industry experts are expecting to see in-city warehouses being set up as storefronts, allowing businesses to modernise meet evolving consumer needs. While most dark stores and fulfilment centres are on the ground floor, rising urban demand may lead to G+2 and G+3 structures at the best industrial parks in India.
Key Considerations:
Overall, in-city warehousing in India is growing because it offers businesses a host of benefits such as:
- Streamlined operations
- Efficient distribution
- Access to a larger workforce
- Quick last-mile delivery
- Reducing the cost of transport
- Proximity to the consumer base
- Increased customer satisfaction
Although, to leverage everything in-city warehousing can offer, it’s crucial to choose the right space for integrated logistics. While looking for in-city warehouses and distribution centres, whether to purchase or lease, it’s important to focus on factors like location, connectivity, space, customisable configuration, plug-and-play features, world-class infrastructure and stringent safety measures. Since the in-city warehousing and storage sector is likely to grow, it is best to invest in a space that will keep up with expanding business needs and rising industrial development standards for a profitable warehouse business in India.
At Lodha, we believe in looking towards the future and providing solutions ahead of time. The Lodha Industrial and Logistics Parks (LILP) in Palava and Kurla are examples of just that. Designed to maximise efficiency and streamline operations, LILP features spacious warehousing facilities on sprawling grounds fitted with premium amenities compared to warehouse in Mumbai, warehouse in Taloja, warehouse in Navi Mumbai, warehouse in Bhiwandi and warehouse in Thane.
Whether you want to set up a warehouse just outside Mumbai or in the heart of the city, LILP Palava and Kurla will allow you to scale your business and reach your customer base just in time. To find the best in-city warehousing facility in Kurla, in-city warehouse solutions in Mumbai, distribution solutions in Mumbai, in-city warehouse in Chembur, in-city warehouse in Thane and in-city warehouse companies in Mumbai, look no further than Lodha Logistics Park (LLP) in Kurla, Mumbai.