The Evolution of Warehousing in Tier-2 and Tier-3 Cities in India

30 Nov, 2023 6:37:03 PM / by Sanjana Grover, Transport Corporation of India Ltd.




Within the realm of logistics and supply chain management, there is a strong demand for expanding warehouses from both consumers and businesses. While these expansions offer attractive opportunities, they require significant initial investments and come with inherent risks.

Unveiling the Growth Potential

The landscape of Tier-2 and Tier-3 cities in India presents a promising opportunity for warehouse expansion. These emerging areas are experiencing a surge in demand for modern warehouse facilities, driven by the growing e-commerce industry, increased internet accessibility, and proximity to consumers.

India's rise as a global supply chain hub, along with government initiatives promoting export and infrastructure development, is fueling a growth in manufacturing activities. At the same time, a focus on Health, Safety, and Environment (HSE) compliance is leading MSMEs and corporates to opt for Grade-A warehouses, resulting in a significant 21% sectoral growth in FY22.

Embracing the Trend: Larger Warehouses Take Center Stage

India is currently witnessing a diverse range of warehousing demands, spurred by the growth of online commerce and the emergence of direct-to-consumer (D2C) brands. These facilities are evolving to incorporate efficient retrieval and storage systems, particularly in sectors such as grocery, pharmacy, retail, and food delivery. Importantly, there is a shift in inventory management from Just in Time (JIT) to Just in Case (JIC), which is driving discussions around measuring warehousing capacities in cubic feet rather than square feet. This shift is increasing the demand for larger warehouses to accommodate the growing storage needs.

Government Initiatives Facilitate Progress

Government policies play a significant role in propelling India's logistics and supply chain industry forward. Initiatives like the Gati Shakti Master Plan, Inland Waterways, Bharatmala Pariyojana, Multimodal Logistics Parks, Dedicated Freight Corridors (DFCs), and Sagarmala are contributing to the development of world-class infrastructure. These advancements not only expedite time-to-market but also reduce wasteful expenditure, enhancing the value of the supply chain. Furthermore, regulations that promote sustainability and green building certifications are encouraging the adoption of modern and eco-friendly warehousing systems. India's improved ranking in the World Bank's Logistics Performance Index (LPI) is evidence of the positive impact of these initiatives on the sector's growth trajectory.

TCI's Expertise in Warehousing

Within its extensive portfolio, TCI Group manages over 14 million square feet of warehousing space across India and neighboring nations such as Bangladesh, Nepal, and Sri Lanka. Serving a wide range of industries including retail, pharmaceuticals, hi-tech, and more, TCI offers a comprehensive suite of facilities:

  • Robust physical infrastructure including multi-tier racking, pigeonholes, cage bins, mezzanine floors, dock-levelers, forklifts, stackers, and reach trucks.
  • Advanced IT systems that integrate Warehouse Management Systems (WMS), handheld scanners, and Electronic Data Interchange (EDI), supported by meticulously refined processes for receipt, put-away, picking, packing, manifest, and shipping.
  • Value Added Services (VAS) such as Quality Control (QC), labeling, kitting, and returns, providing extensive backend support to clients.
  • Seamless coordination with suppliers and end-customers, highlighting TCI's commitment to efficient logistics solutions.

This interplay between growing demand, government initiatives, and industry expertise drives the dynamic evolution of warehousing in India's Tier-2 and Tier-3 cities, signifying a crucial juncture in India's logistics and supply chain landscape.

Topics: Everything Logistics, Leaders in Logistics

Corporate Communication Executive at Transport Corporation of India Ltd. (TCI Group)