The Indian economy has outperformed in the past few decades with a few ups and downs. Almost every sector has done well. With the mobilizing economy, you need a fast movement of goods. What makes it possible? It is nothing but good-quality logistics and supply chain management.

Along with a good-quality system and efficient workflow, you need something else to build a good supply chain system. It is nothing but proper warehouses.

Logistic companies have their warehouses, or they hire facilities from warehousing companies. The latter has been found more efficient in recent years. Thus, there has been an emergence of warehousing companies who are specialized in the niche.

A warehouse can be useful for several businesses, e.g., e-commerce, FMCG, logistics companies, and so on. With transaction volumes increasing manifold, the demand shows the increasing trend.

Reports by research agencies show that warehouse leasing volume is showing as high as 80% increase year after year, which is quite impressive. After GST implementation, the demand has shown a greater increase. It is because companies want to store the stuff in local warehouses so that the appropriate exemptions can be asked.

As the sector becomes more organized, the need for large-sized warehouses increases further. Post Covid-19, people will prefer online purchases more instead of going to the local shops. Therefore, a big hike in the demand is expected in sectors like E-commerce, retail manufacturing, FMCG, and so on.

With the development of e-commerce, there is a need for advanced logistics facilities as well. Since it is the order fulfillment arm, it can be a big differentiator and enabler for e-commerce companies. They can create unique experiences in adding and retaining loyal customers.

What does an e-commerce business expect from the logistics facility? Well, the expectations have been changing with the evolution of the business and its preferences. To build an ecosystem, which is robust and responsive, the logistics companies have to deal with some challenges. Some of these challenges are internal and some are external.

What factors that will drive the growth?

TLet us find out some major driving factors behind the exponential growth in the warehousing business in India. They can affect an organization based on the type of the business.

Support by the government

The growth in the warehousing business has been possible due to various initiatives taken by the government. For example, the government gave infrastructure status to the logistics business. It includes warehousing and cold chain. As a result, companies got credits at competitive rates.

Another gamechanger move is to include the logistics sector under the GST umbrella. It generated the interest of big industry players. The sector has become more organized. More entrepreneurs are willing to put money in the sector. As more money is being pumped in, bigger warehousing spaces are being created.

All these factors give a “much required” thrust to the sector.

Warehousing gets sector-wise demand

In the changing business scenario, several sectors demand for good-quality warehousing space:

• Ecommerce
• Retail
• Automobile
• Agriculture
• Chemical
• Pharmaceutical
• Food and beverages

It is clear that warehouse spaces are limited, and the demand is always more. So, warehousing companies see a positive thrust.

Small towns and villages are emerging as new business centers

So far, the business was concentrated in bigger cities and metro cities, which resulted in huge pressure on the infrastructure and other facilities. In recent times, the trend has shown a change. Now Tier-II cities and big towns are becoming the new business hubs. Since the cost of establishing and running a business is lower in these cities, entrepreneurs find it a profitable proposition.

For warehousing companies, it is a great opportunity as establishing a well-equipped warehouse is immensely costly in bigger cities. Hence, they are building infrastructure in small towns and giving on rent to the clients.

Technology makes the business further exciting

The role of technology is important in every business. It is impossible for any sector to be left untouched by technical expertise. How can be warehousing an exception to it? Warehouse specific technical solutions that can take the sector to new heights are:

• Automation of warehousing solution
• Warehouse management system
• Voice and scanning technology
• Barcoding and scanning
• GPS
• Systems based on the Artificial Intelligence

These technologies make processes faster and smoother. They make the task force management efficient by automating the operational activities thereby reducing the dependency on human resources. Less number of line managers and operators will be required to manage the warehouse. It brings down the operational cost greatly.

Superior expert processes

Since global brands are getting access to the Indian market and they are establishing production unitslocally, it gives a boost to the business. It brings another benefit. Local companies are also forced toimprove their processes to compete with global players.

In this process, their processes get refined. When the quality of processes improves, a company can graba chance in the international supply chain market. New opportunities open new doors to success.

Better expert processes increase work efficiency and reduce the possibility of errors. Zero defect processes build trust amongst users.

What is there in the future?

Looking at the pace with which warehousing business is flourishing, the sector shows an upward trend inthe predictable future. When industry-specific initiatives like grant of infrastructure get coupled with the growth of E-commerce, it brings a phenomenal opportunity for warehousing companies. Who will get benefited from it the most? It is specialized privately owned warehouses such as cold storage or warehouses for big logistic parks and so on. Warehousing companies are expanding their businesses and adding more facilities to get better projects and clients. It is a win-win condition for the clients as well.