Amazon, Flipkart mulls leasing warehouse space to meet festive sales rush

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Amazon, Flipkart mulls leasing warehouse space to meet festive sales rush

New Delhi and Mumbai: Amazon and Flipkart are in talks with several warehouse center across the nation over to lease their space temporarily in anticipation of a bumper festive season as consumers increasingly click to buy and avoid crowding brick and mortar stores due to the continuing pandemic.

Both companies expect their sales to outpace existing fulfilment centres and are searching for gradual storage areas for the following hardly any months, until they build up their own facilities.

While Amazon has just taken around 3 lakh square feet of room at National Highway 8 in Gurugram for a few months and is in converses with others to lease more, Flipkart too has held exchanges with multiple buyers, according to two people aware of the developments.

“E-commerce players take space on an temporary basis before the festive season and leases are typically 4-8 months. but, this year, the size of such deals is required to be greater,” said Abhijit Malkani, CEO of logistics developer ESR, an venture of private value firm Warburg Pincus and global investors.

Typically, the size of temporary lease ranges from 50,000 sq ft to 1.5 lakh sq ft.

Last month, Amazon said it plans to set up 10 new fulfilment centres, outfitting to take into account a flood sought after for online buying typically just observed during the festive season.

Amazon and Flipkart didn’t react to an email query.

“A large number of the offline retailers have make a move to online due to coronavirus and even the wedding shopping is online. At any rate three e-commerce giants are in converses with warehouse operators in Gurugram for temporary space to take into account request from North India and deals are relied upon to close in a few days,” said Anckur Srivasttava of GenReal Advisers. “Some of these swing space leases are as of now set up,” he included.

Within apparel, most brands are detailing more than 20-25% commitment from online channels, more than doubling over the past six months.

The festive season, which starts with Navratri and goes up to Diwali, for the most part contributes 40-45% of yearly business of white goods makers.

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