We will continue to work with our partners in supporting the omni-channel expansion
Being a global player having warehouses worldwide, what are your take on warehouses in India?
Over the years, the warehousing industry in India has evolved from storage space to highly sophisticated warehousing and logistics systems. This transformation towards sophisticated state-of-the-art warehousing has resulted in the increase in demand of Grade A warehouses. This need has further been supplemented by demand from e-commerce platforms which need special requirements in layout, operations & technology to meet the changing consumer behavior. Overall, India’s warehousing industry is evolving rapidly, driven by technological advancements, e-commerce growth, and increased demand for efficient storage and distribution solutions. Lastly, ESG compliance is now becoming a necessity in the warehousing sector. The demand for sustainable warehouses is set to increase because of global push and rising awareness among corporates on rising cost of resources (energy, water, materials, etc).
When considering investments in warehouse facilities in India, what are the key aspects that you prioritize?
The key aspects IKEA considers in warehouse facilities in India include proximity to demand centers to ensure efficient transportation & better lead times to customers; access to highways, railways & ports. The IKEA 3PL warehouse in Farruknagar is close to rail ICD which enables us to transport goods via rail from Mumbai port which not only reduces cost but is also sustainable by reducing CO2 emissions. We invest in Grade A facilities which are equipped with modern amenities including ventilation, lighting, safety features, waste management, solar panels, etc. We are proud to say that IKEA India has been a front runner when it comes to having a diverse workforce. Our warehouse in Pune had 50% women co-workers. While selecting warehouses we also take into consideration eco-friendly practices like solar panels, rainwater harvesting, waste management to reduce environmental impact and technology & automation to optimize & enhance efficiency.
What are the challenges faced by warehousing players in India?
The foremost challenge we face is India includes very limited 3PL’s in the market that share the same IKEA ethos; Implementing stringent IKEA-WAY supplier standards becomes a challenge; finding diverse & skilled manpower especially during peak period; growing challenges of increasing land prices; labour costs putting a lot of cost pressures; complex laws & regulation in acquiring land; lack of standardization; flexibility in supply chain to minimize the supply – demand gaps, amongst others.
What are the global best practices you would like to see its implementation in India?
A few of the global practices we would see its implementation in India are smart warehousing that leverages technology & automation to improve efficiency & reduce the impact of increased cost pressures; switch from management of single company warehouses to a multi-client and multi-product model. This gives the retailer flexibility to manage the demand seasonality at optimized costs; and implement world-class standards for warehousing design, safety, and operations. Certifications like LEED, IGBC can boost credibility.
What are your future investment strategies for warehouse facilities in India?
We will continue to work with our partners in supporting the omni-channel expansion for IKEA India. The key focus will be to develop long term partners who share similar mindset offering sustainable long-term solutions as IKEA grows in India.
