Indian Physical Retail Companies in 2022 and 2023, Outcompete E-Commerce Companies in Leasing Warehouses

Physical Retail Companies Outshine E-Commerce Companies in Warehouse Leasing in India 2022-23

In India, offline companies rented more warehouse space than e-tailers for the first time in five years in 2022, as sales at both their physical shops and online platforms increased.

In 2022, offline retailers rented 3.2 million square feet of warehouse space, returning to pre-pandemic levels, according to statistics from CBRE, a commercial real estate services business.

In 2022, the amount of warehouse space leased by ecommerce firms decreased by more than half, from 5.9 million square feet in 2021 to 2.2 million square feet, as demand switched towards unrestricted physical retail locations.

"The return of the majority of shoppers to physical retail after the pandemic and the preference of consumers for hybrid commerce is causing businesses to reevaluate their warehouse leasing strategy. In 2023, we anticipate a rise in retail leasing activity, while ecommerce businesses optimise their strategies and boost their existing throughput" said Anshuman Magazine, CBRE's chief executive officer for India, Southeast Asia, the Middle East, and Africa.

Post-pandemic, ecommerce and retail companies in India have been optimising their warehouse space, according to experts.

The peak epidemic prompted an unexpected leasing trend in the retail and ecommerce sector as companies sought innovative ways to assure company continuity, according to Magazine.

With a total space take-up of 31,6 million square feet in 2022, India's entire leasing activity will have almost recovered to pre-pandemic levels.

In 2022, the proportion of warehouses leased by e-commerce enterprises will fall from 23% in 2018 to 7%. In 2022, the share of offline merchants reached 10%, after falling to 7% in 2020.