Amazon and other e-commerce giants' warehousing needs have dropped significantly

A recent study shows that the demand for warehousing space by large e- commerce companies such as Amazon, Flipkart, Bigbasket and FirstCry has dropped significantly this year , mainly due to slowing consumer demand .

Data from real estate consultancy Colliers International shows that in the first half of 2022, e-commerce companies accounted for only 4% of total warehouse leasing, down from 23% in the first half of last year.

Another report from real estate data analysis company CRE Matrix said that the number of warehouse leases by the top five e-commerce companies alone in the first eight months of 2022 fell 83% from 2021 , while the warehouse leasing area of ​​these giants increased 107% year-on-year in 2021 .

According to CRE Matrix, Amazon leased 1.4 million square feet of warehouse space in the first half of 2022, while rival Flipkart leased only 110,000 square feet.

BigBasket , now owned by the Tata family, has leased 300,000 sq ft. Its larger e-commerce businesses , such as FirstCry and Blink it (formerly Grofers), have not rented any large warehouses so far this year.

“ This is a stabilization period for the e-commerce industry because it has been in overdrive over the past two years , ” said Abhijit Malkani, CEO and head of ESR India , an industrial and logistics real estate developer . “ A lot of our demand now comes from retail and pharmaceutical clients. ”

Because consumers felt more comfortable shopping online during the epidemic , leading to growing demand for online shopping, Flipkart and Amazon India doubled the scale of their operations during the epidemic, adding more warehouses and workers.

Anshul Singhal, managing director, Welspun One Logistics Park, said: “ Warehousing demand from e-commerce players is declining as these companies have leased excess warehousing space in the past two years . However, the e-commerce sector remains resilient and is expected to rebound sharply in 2023. ”

Vimal Nadar, senior director and head of research at Colliers India, said: "With the festive season approaching, e-commerce companies are stepping up hiring as they expect sales to increase in both metros and smaller cities . In addition , India's e-commerce market is expected to double in the next five years . "

Colliers International mentioned that in the first half of 2022, the total leasing area of ​​Grade A industrial and warehousing facilities in India's top five cities reached 10.8 million square feet, a year-on-year increase of 7%.

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