Indian e-commerce cos to invest up to $1.9 bn on infra by 2020

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

According to a joint study by consultancy firm PwC and industry body ASSOCHAM, Indian e-commerce industry will spend USD 950-1,900 million by 2017-2020 on infrastructure, logistics and warehousing.

"The total spend on warehousing and sortation centres could be as high as 3-6 per cent of top-line revenues, which represents an cumulative spend of over USD 450-900 million of spend in warehousing till 2017-2020," ASSOCHAM-PwC study said.

The industry is expected to spend an additional USD 500- 1,000 million during the same period on logistics functions, leading to a cumulative spend of USD 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 centres.

This indicates an addition of 6-12 per cent to the space available in form of organised warehousing in India and almost 25-50 per cent of all the incremental addition of consumption driven warehousing space in the same period, it added.

"The potential of sector and the likely liberalisation 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 USD 10-20 billion by 2017-2020," the study said.