The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Akash Chopra , MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
Indian e-commerce sector is booming at an enormous pace since last 3 years. While some sectors are trying to escape the onslaught by e-commerce like the shopping malls, others like brick-and-mortar real estate and logistics space are witnessing a huge growth.
Last year in October Flipkart signed the largest office lease deal of the decade. It was a record lease of 3-million sq ft of space in Bengaluru. Similar deal was signed by Cisco way back in 2004 when it leased 3.2 million sq ft of office space in Bengaluru. Amazon has a combined leased space of 5 million sq ft in the country. E-commerce is fuelling the growth in the real estate sector and in long run it is estimated to contribute anywhere near 10%.
Stories of other sectors booming due to e-commerce’s advent in India don’t stop here. Logistics space sector is becoming increasingly vibrant as the e-commerce is strengthening its back-end operations. E-commerce has surpassed FMCG sector in warehousing space absorption. E-commerce has 1.7 million sq ft warehousing space out of 7 million across the seven metros in the country. This is approximately 25% of the space where as FMCG has absorbed 23%. In 2013 e-commerce accounted for 18% of the warehousing space adding additional 7% in 2014. In coming years analysts are predicting a huge demand in warehousing space led by the e-commerce industry.