Market Feasibility Services for the Warehousing Industry in India

The Indian warehousing market was valued at USD 15 billion in 2022 and is poised to reach USD 23 billion in 2025, growing at a CAGR of 15.7%. The warehousing industry plays a crucial role in the economy connecting manufacturers, businesses, distributors, and customers. Thus, there is a need for feasibility for warehousing sector in India.

It facilitates storage, packaging, and timely delivery of raw materials, finished goods, hardware, machineries, etc.

Factors like the e-commerce boom, concentrated government initiatives, increased manufacturing activities, and infrastructure push are fueling growth in the segment. Indospace, Blue Dart, Gati, Mahindra Logistics, and Shiprocket are major players in the warehousing market in India. Indospace, the largest homegrown developer, has almost 50 grade "A" parks across the country. Meanwhile, Blue Dart’s success stems from tech-driven efficiency. They use data analytics to optimize routes and recently conducted drone-related deliveries in many parts of India. The brand also owns aircrafts to carry packages.

As of 2023 warehousing space in India was 956 million sq. ft which is expected to reach 1.2 billion sq. ft by 2027 across all Indian cities. Grade A warehouses have been experiencing robust growth, nearly doubling from 178 million sq. ft in 2022 to 398 million sq. ft in 2027 growing at a CAGR of 17.4% since 2022. Although Grade A is growing fastest, Grade C stock remains the largest segment with space of 496 million sq. ft by 2027(est.). Whereas Grade B stocks are estimated to reach 394 million sq. ft by 2027. More than 50% of these warehousing units are in metropolitan cities like Ahmedabad, Bangalore, Chennai, Mumbai, Delhi, and Pune.

So, invest in market research for logistics & warehousing industry in India that can be insightfully done by India watch with precision.

Insights on Customer Segments

3PL/logistics remains the largest growth driver of the Indian warehousing industry with a market share of 33% in 2024. Mumbai & Delhi NCR led the demand for 3PL/logistics. The e-commerce sector (27%) has also shown robust growth spurred by increased online shopping across retail, grocery, pharmacy, and food delivery, further accelerated by COVID-19. Retail, the 3rd largest customer segment experienced a surge jumping from 4% in 2022 to 10% in 2024.

Manufacturing (including electronics, auto & engineering) witnessed an uptrend in market share fueled by manufacturing decentralization from China, "Make in India," and PLI schemes. FMCG, and FMCD, accounted for 7% of 2024 transactions, with Pune, Chennai, and Ahmedabad being key markets.

Slew of Government Initiatives & Policies Supporting the Sector

Go in depth through Market research for warehousing sector in India and know about GOI as they have launched various initiatives to revolutionize and modernize the warehousing sector. These policies aim to improve infrastructure, reduce logistics costs, and enhance efficiency. The PM Gati Shakti National Master Plan (NMP) focuses on technological and infrastructure development. Analytical tools within the NMP provide enhanced visibility and informed decision-making for infrastructure development related to warehousing.

National Logistics Policy (NLP) aims to reduce logistics costs from 13-14% to 8% of GDP by 2030 and create 20 million jobs in logistics industry by 2025. To enhance the global competitiveness of Indian manufactured good, the policy is focused on the improvement of modern warehousing and efficient cold chains.

The National Warehousing Policy was introduced to reduce transportation and logistics costs through the development of dedicated warehousing zones. These zones will be located on NHAI-owned land parcels along highways and expressways outside major cities. As a result, it will reduce urban congestion and streamline goods movement.

As the warehousing sector continues to thrive, PE investments are also soaring. In fact, warehousing is the biggest recipient of PE capital in 2024, surpassing other prominent segments such as office & residential, also there comes the need for feasibility services for industrial real estate for better accessment. Major institutional investors such as real estate funds, AIFs, pension & wealth funds are drawn towards the warehousing & supply chain sector in India. Due to rising leasing rates and declining vacancy rates, HNIs are also investing in warehousing & cold storages aggressively.

Future Outlook of the Warehousing Industry in India

The warehouse industry of India is all set for a bright future backed by technology, government initiatives, and sustainability projects. Hence, the market research for warehousing becomes an important aspect.

India in the next five years is positioned to be among the top 6 warehouse automation systems globally (projected market size: USD 2 Billion yearly).

This automation trend will lead to better efficiency and therefore be very relevant for global competitiveness. Warehousing storage is estimated to grow at a CAGR of ~15.64% to hit a market size of USD 31.06 Billion by 2027. The government is actively promoting digital transformation and the integration of advanced technologies such as artificial intelligence (AI) and data analytics. Additionally, the government has opened the sector to 100% FDI in logistics parks and warehouses, creating an appealing environment for global investors.

Regulatory measures for instance, the GST Act, National Logistics Policy, and warehousing standardization are strengthening the growth of the sector.

Although the industry is expanding, it continues to face hurdles like traffic congestion, poor use of transportation fleets, inefficiencies in material handling, and delays due to procedural issues.

There is a push towards warehousing in Tier 2 and 3 cities from 3PL/logistics providers and e-commerce players.

Noticeable focus on sustainability is witnessed, with more projects exposing ESG certification warehousing as mandated by India’s intent to be net zero carbon by 2070. Furthermore, the increasing focus on green logistics practices and the integration of renewable energy sources within the warehousing sector position India as a key player in the global market landscape. These advancements are expected to further contribute to the nation's economic growth and technological progress.

How The India Watch can Help with Feasibility Studies?

As numerous investors, 3 PLs, SCM enterprises, e-commerce ventures, manufacturers, etc. are investing in warehousing and feasibility study for cold storage, there is increased need for feasibility services in the sector. Market and feasibility analysis of warehousing can help in reducing risks, enable better decision making, and optimize the operations. It can also help in reaching out to suppliers and customers better.

If you are an investor or a business looking to conduct a feasibility study on the warehousing sector in India, The India Watch can help. The blue print of feasibility study of a warehouse will comprise (though not limited) to the following:

❖ Warehousing industry and market sizing, trends, demand & supply, potential scanning, future projections, etc.

❖ Key demand drivers & limiting factors

❖ Major supply side information, key warehouse developers, market share, USPs, and growth strategy of competition.

❖ Assessment of major customer segments, their needs & wants, market gaps, price sweet spots, etc.

❖ Product evolution and technological assessment

❖ Detailed Operational assessment

❖ Detailed location assessment including, addressable market, accessibility & connectivity, infrastructure, etc.

❖ Market assessment, demographic analysis, customer base, saturation, etc.

❖ Regulatory, policy, & legal insights

❖ Financial projections, cost estimation, ROI evaluation, break-even analysis, etc.

❖ Recommendations and future growth road map.

For any further information on market research and feasibility services for logistics sector in India, feel free to drop us a mail at info@theindiawatch.com

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