Indian e-commerce companies to invest up to $1.9 billion on infrastructure by 2020

e-commerce

Buoyed by the growing popularity of online shopping in India, the e-commerce market, which is expected to reach $20 billion by 2020, will see companies investing close to $2 billion in logistics, infrastructure and warehousing in the next six years, a study said yesterday.

According to a joint study by consultancy firm PwC and industry body ASSOCHAM, Indian e-commerce industry will spend $950-1,900 million by 2017-2020 on infrastructure, logistics and warehousing. ”The total spend on warehousing and sortation centers could be as high as 3-6 percent of top-line revenues, which represents an cumulative spend of over $450-900 million of spend in warehousing till 2017-2020,” ASSOCHAM-PwC study said. The industry is expected to spend an additional $500- 1,000 million during the same period on logistics functions, leading to a cumulative spend of $950-1,900 million till 2017-2020, it added.

The study, Evolution of e-Commerce in India, estimates that over the next three to four years, there will be an addition of 7.5-15 million square feet of space in the form of fulfilment centers. This indicates an addition of 6-12 percent to the space available in form of organised warehousing in India and almost 25-50 percent of all the incremental addition of consumption driven warehousing space in the same period, it added. ”The potential of sector and the likely liberalization in form of FDI could be a vital factor in attracting significant investments resulting in better infrastructure and robust supply chains,” PwC Director (Operations) Saurabh Srivastava said.

The growth of e-commerce industry has a huge potential in the country translating into huge gains for the manufacturing industry, infrastructure and jobs, he added. ”Size of the e-retail industry is poised to be $10-20 billion by 2017-2020,” the study said.