With fading boundaries and growing consumer traction, e-commerce has fast transformed the entire retail landscape in the country. While physical retail is still holding grounds, it’s the strong logistics that makes or mars the entire gamut of e-commerce. Online marketplaces unlike physical retail spaces don’t require store spaces in commercial hubs or shopping malls, yet they need a resource base or hub to transport goods to consumers in the shortest possible time and that’s where logistics has a major role to play. Suppliers require large spaces in strategic locations to stock their goods, run the office where the stock is managed and arrange for speedy, timely disposal to where the orders have been placed. There is a requirement for large logistic parks, which can stock the material and arrange for shipment to addresses from where the order arises.
Amazon shows the way
Online retail giant, Amazon, has diverted half its investment in India to building its logistics capabilities. Amazon India runs the largest e-commerce warehouse in the country, in Telangana, spanning 400,000 sq ft. The United States, known for its high retail transactions, is high on online shopping with sales having crossed $459 billion in 2017 as estimated by Forrester Research, which translated to roughly 12.9 per cent of the projected total retail sales. Forrester further estimates this will move up to 17 per cent by 2022. In this scenario, many malls in the US are already looking to adapt to the altered landscape.
In this altered scenario, it is not surprising to see home grown e-commerce major like Flipkart planning to set up a 4.5 mn sq ft logistics park in Bengaluru. The integrated park spread across 100 acres, expected to be one of its kind in the country, is all set to house multiple warehouses that will be quite competitive in size those set up by Amazon in the US and Alibaba in China.
It is estimated that over the next 10 years, the requirement for warehousing space to cater to this demand in Bengaluru alone would be 4.5 mn sq ft. This means the massive logistics park on the anvil would be adequate merely to serve the city alone, calling for similar units in other regions of the country. This doesn’t necessitate consumers are moving away from conventional malls and traditional retail spaces, the spaces will transform to accommodate more experience centres, but retail will continue, albeit at a lower expanse, as compared to the past. Designer retail and skilled retail ware will continue to command traditional retail space. With all these mechanics in place, we can say that there is a massive transformation is on the cards.