Ecommerce marketplaces contribute to huge growth of logistics sector

The Goods and Service Tax (GST) that is to be implemented in a few months will benefit more industries than assumed. With the implementation of GST, ecommerce companies will look at bringing down their costs by handing logistics to third party service providers. This in turn will have an effect on the warehousing sector, with demand going up.

Transport Corporation of India (TCI), India’s largest private logistics company sees an opportunity thanks to the GST. The company finds itself rising in demand among ecommerce companies. It has nearly 1,400 branches, 10.9 million square feet warehouses, and a fleet of 9,000 trucks. This enviable gold mine of resources makes it a natural choice for ecommerce companies.

Booming ecommerce industry coupled with GST to aid logistics and warehousing sector

The Indian ecommerce industry is on a growth spurt, and is slated to hit the roof not unlike Jack’s magical beanstalk. This will have a direct impact on the expenditure on logistics. Companies like TCI stand to gain big bucks.

Vineet Agarwal, Managing Director of TCI, feels that GST is a move in the right direction. He says, “Implementation of GST will lead to need for larger warehousing and more movement to hubs. It would also mean lesser paper work and faster movement of trucks.”

Warehouses in West Bengal grow in number

In the meanwhile, commercial real estate in West Bengal has witnessed a spike in its growth, thanks to ecommerce companies. Amazon, Flipkart, Ranbaxy, and Asian Paints purchased warehousing space in the state.

Rahul Baid, head of corporate transactions at Champalall and Co, a real estate company, says, “Total warehouse space absorbed in the last one year was close to 1.5 million square feet against 1 million sq. ft. in 2014.”

Flipkart has acquired the maximum space of nearly 1,50,000 square feet. According to an EKart representative, “Our 150,000 sq. ft.-plus capacity warehouse in the east improves our ability to deliver goods within a day in a very strategic market that is also growing rather swiftly.”

As peripheral and support industries grow, online sellers can continue their business in peace. With more logistics and warehouse companies on the rise, it will translate to better and quicker deliveries, thereby aiding the sellers.