Vikas Choudaha, Senior VP and Business Head, Godrej Storage Solutions talks about the Indian market and explains the need for Grade A warehouses and need for expanding to tier 2 and 3 cities. He is sure of growth with investments done in boosting logistics and warehousing infra by building multimodal logistics parks and dedicated freight corridors.
Ritika Arora Bhola
What megatrends do you perceive around your operations in warehousing and supply chain segments in 2022?
In India, the warehousing sector is undergoing transformation to keep up with the growing manufacturing sector and increased demand, particularly in tier 2 and 3 cities. One of the development factors in the warehousing sector has been the e-commerce industry. With the reorganisation of taxes, outsourcing logistics will continue to be a prominent trend in the industry. With the advent of GST, the supply chain has been reorganised, and warehouses are becoming closer to consumption sites. Customers’ demand for efficiency and quality of service will drive up the share of Grade A and Grade B warehouses.
How do you manage your logistics network and supply chain management system in terms of creating value for customers?
While servicing our customers’ requirements at Godrej Storage Solutions, we provide solutions across industries around warehouse operations, safety, and have specialised service offerings on warehouse audit and building capabilities. In large cases with complex warehousing operations, our handing over process includes providing training to the user group for better and improved usage. We continue to innovate to give our customers the best solutions and service throughout the life of the product.
Please elaborate on the infra for handling and storage of consumer durable products and cold chain products?
We help in creating warehouse infrastructure through our storage solutions for our customers in the consumer durables and cold chain industry. On a broader level, we have various racking and shelving solutions which are industry applications specific to address customers’ requirements for storage movement, handling, and management of goods.
What are the factors driving tech-enabled growth in procurement in India and what is necessary for digital transformation in procurement?
The GEM portal is an initiative by the government where all government purchases are moving towards e-procurement. Currently, with the government emphasising infrastructure and manufacturing sector growth, the initiatives announced will positively impact larger buys through the e-procurement route.
What are the major growth drivers for warehousing in India?
E-commerce and third-party logistics (3PL) sectors have been crucial growth drivers of the business. Industries such as food packaging and processing, cold storage, cold chain, automobiles, textile and apparel, chemicals, and defense manufacturing contribute to the growth trajectory. The manufacturing sector is expected to grow, enabled by policy interventions by the government and domestic demand. This, in turn, will result in a lot of opportunities in the factory-attached warehouse category, which has been our stronghold.
What is driving significant shift towards tier 2 and 3 cities?
An increase in consumption-driven demand and doorstep delivery services is driving the e-commerce boom across the country, including in tier 2 and 3 cities. In the upcoming years, we are looking at secondary markets to grow at a faster rate than primary markets owing to the increase in grocery penetration and in-city warehousing. With the thrust on manufacturing by the government across sectors and territories through various schemes such as PLI, more warehouses will come up in tier 2 and 3 cities. Cities such as Ahmedabad, Kolkata, Hyderabad, Guwahati, Lucknow, Kanpur, Coimbatore, Patna, Bhubaneshwar, Nagpur, Indore, and Vizag are the emerging new markets that look promising hotspots in future for the warehousing sector.
Is India ready for the smart tech-friendly Grade A, asset class warehouses and logistics parks? Does India have the kind of infra and multimodal connectivity available?
With the scale of business and complexity, which comprises supply chain processes such as automation, packages handled and throughput, it becomes a necessary to have Grade A warehouses. For any large business or an emerging business, scale becomes inevitable and with India’s growth story intact, the share of Grade A warehouses will grow in the coming years. Indian government is investing in boosting infrastructure across the country by setting up 35 multimodal logistics parks, which are planned along dedicated freight corridors. An incentive scheme such as the recently launched PLI for manufacturing will add to the growth in the manufacturing sector along these corridors.
