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Retail a key driver of warehousing demand: CBRE report

The report, “The Three-mile Tale: Dissecting The New-age Retail Supply Chain Network”, was released by real estate consultant CBRE and Indospace at a CII Realty conference here on September 26.

e-commerce, FMCG
Within the retail sector domain, hypermarkets (51%) and fashion apparel (32%) companies dominated the share in warehousing demand. (IE)

The collective warehousing demand for e-commerce, FMCG, and retail sectors have accounted for nearly 27% of the total demand in the 2019-H1-to-2023 period, according to a report by CBRE and Indospace.

The report, “The Three-mile Tale: Dissecting The New-age Retail Supply Chain Network”, was released by real estate consultant CBRE and Indospace at a CII Realty conference here on September 26.

Within the retail sector domain, hypermarkets (51%) and fashion apparel (32%) companies dominated the share in warehousing demand.

Notably, the share of retail in total demand has increased from 8% in 2019 to 13% in 2022. Although it touched 9% in H1 2023 and is expected to strengthen in H2, 2023, backed by an anticipated increase in consumption during the festive season.

As consumer expectations evolve, retailers recognize the efficiency and advantages associated with investing in supply chain transformation. Therefore, going forward, a strong warehousing demand is expected from retailers, especially those with omnichannel fulfilment requirements.

India’s retail landscape is undergoing an unprecedented shift, owing to a surge in retailers, store expansion and rapid growth in online shopping,” Anshuman Magazine, chairman and CEO, India, South East Asia, Middle East and Africa, CBRE, said. The convergence of social media and e-commerce platforms has enabled an extensive online purchasing ecosystem, he added.

An increase in the disposable income of consumers is likely to boost India’s retail market.

India’s per capita income is expected to rise from $2,278 in 2022 to $5,242 in 2031, which will aid discretionary spending further and most income brackets will have more to spend on discretionary items.

Between 2022-2030, consumer spending across discretionary categories such as clothing and footwear, recreational and cultural services along with restaurants and hotels are expected to grow by 1.6x, 2x and 2.3x respectively.

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First published on: 28-09-2023 at 03:30 IST
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