WIXLIB

Transportation and LogisticsOrganized retail warehousing stock is expected to growfrom 60M sqft in FY20 to 205M sqft in FY25, about 3.5x growthKey highlights Retail warehousing space was 60M in FY20and is expected to reach 205M sqft by FY25 Grade A & Grade B stocks to grow at 29% and24% CAGR, respectively, till FY25 Growth expected on account of increase inretail sales with rising sales of essential andnon-essential products, and integration ofretail stores with internet companiesGrade AGrade BSource(s): Interviews with retail companies, Knight Frank, CRISIL, JLL, CBRE, CARE Ratings, Colliers International, Praxis analysis Praxis Global Alliance15

Transportation and LogisticsSix emerging opportunities for investment in retail warehousing acrossinfrastructure development, centralization, automation, & artificial IntelligenceShort-term (up to Mar ‘21) toMedium-term (up to Mar ’22)Long-term (up to Mar ‘25)Expansion into tier-2 cities (Short-term)To service the reverse-migrated populationas WFH becomes the new normal Work from home (WFH) has resulted ina resource shift to smaller towns increase in local consumption of dailyrequirementsWarehousing hubs near manufacturing hub and portsNew hubs are expected to be set up benefitting from thechanged global attitude toward Chinese manufacturingand government’s policy to reduce dependence onimports Helps retailers/manufacturers in maintainingcentralized inventoryTechnologies that aid business continuityData recovery services and cyber securitysolutions Grade A warehouses are oftenpre-fabricated and more automated.Besides robotics, software systemsdrive the businessMulti-party ‘logistic parks’To provide players flexibility for storage space on pay perpallet basis Helps players manage inventory for volatiledemand Can be used for strategizing supply network fornew products Popularized by centralization of storage spacespost GSTSource(s): Interviews with retail companies, Praxis analysisArtificial IntelligenceTo manage inventory and reduce dependency onlabor Reduction in dependency on manual laborand increased efficiency SaaS for Warehouse Management System(WMS) and Transport ManagementSystem (TMS) Time saving in loading/unloading andmoving cargo around the warehouseRacking & vertical placement infrastructureTo optimize horizontal space requirement Heavy investment with longer RoI Portability low – poor flexibility ofrelocation Praxis Global Alliance16

Transportation and LogisticsOrganized pharma warehousing stock is expected to growfrom 15M sqft in FY20 to 22M sqft in FY25Key highlightsPharma organized warehousing stock (M Y18FY197.48.08.7FY20FY21PFY22PGrade A10% Grade A & Grade B stocks to grow at 13% and10% CAGR, respectively, till FY25 Growth is expected on account of storagerequirements of COVID vaccine and otherpharma products9.06.44.911%17.710.8 Pharma warehousing space was 15M in FY20and is expected to reach 22M sqft by FY2511.313%FY25PGrade BSource(s): Interviews with pharma companies & logistic players, Knight Frank, CRISIL, JLL, CBRE, CARE Ratings, Praxis analysis Praxis Global Alliance17

Transportation and LogisticsEight key opportunities for investment in pharma distributionShort-term(up to Mar ‘21)Full-stack logistics for APIproduction - To provide distributionnetwork for upcoming segment Guaranteed growth segmentwith favorable regulatorypolicies (100% FDI allowed inpharma) & numerousdedicated grantsExpansion into tier-2 citiesTo service the reverse-migratedpopulation as WFH becomes thenew normal Work from home (WFH) hasresulted in a resource shift tosmaller towns - increase inlocal consumption of dailyrequirementsMedium-term(up to Mar ‘22)Cold chain & warehousesTo provide for 30% unmet demand (by volume) 25% vaccines wasted annually due to shortage of coldstorage facilities – requirement by pharma players toconserve bottom-lineWarehouses for e-pharmaciesTo provide 200-350K sqft warehouses to distribution-focussede-pharmacies Gaining stronghold since GST; need to intensify due toabsence of BCP among C&F agents Require tech-enabled warehouses (IoT for inventorymanagement, advanced batch traceability & TMSsystems) Use tech heavily to eliminate middlemen for transportfrom manufacturers to retailers/customersTechnologies that aid business continuityData recovery services and cyber security solutions Grade A warehouses are often pre-fabricated and moreautomated. Besides robotics, software systems drive thebusinessSource(s): Interviews with pharma & e-pharmacy companies, Praxis analysisLong-term(up to Mar ‘25)COVID-19 vaccine distribution networkTo expedite reach of vaccine & gain goodwill for futureinvestments India well-positioned to mass produce vaccines withprominent players like Serum Institute of India andBharat Biotech already producing vaccines Fast & safe distribution for domestic as well as exportvolumes critical – opportunity for large logistic playersMulti-party ‘logistic parks’To provide players flexibility for storage space on pay per palletbasis Helps players manage inventory for seasonal demand flu, typhoid, etc. Useful for storage of goods with sporadic demand Easy adoption in near-term as collaborative practiceswith sharing of resources continueRacking & vertical placement infrastructureTo optimize horizontal space requirement Heavy investment with longer RoI Portability low – poor flexibility of relocation Praxis Global Alliance18

Transportation and LogisticsOrganized e-commerce warehousing stock is expected to growfrom 56M sqft in FY20 to 227M sqft in FY25; a 4x growthKey highlightsE-commerce organized warehousing stock (M 626.834.844.8FY18FY19FY20FY21PFY22PGrade A27% Grade A & Grade B stocks to grow at 30% and27% CAGR, respectively, till FY25 Growth expected on account of growingpenetration of e-commerce and increasedreach in Tier 2/3 cities114.830%FY25PGrade BNotes(s): Othersincludewithincumbentand viewse-commercecompanies,Knight Frank, CRISIL, JLL, CBRE, CARE Ratings, Colliers International, Praxis analysisSource(s): Secondary research, PGA Labs analysis29% Ecommerce warehousing space was 56M inFY20 and is expected to reach 227M sqft byFY2592.038.637.6CAGRFY18-25P Praxis Global Alliance19

Transportation and LogisticsNine emerging opportunities for investment in Ecommerce warehousingShort-term(up to Mar ‘21)Medium-term(up to Mar ‘22)Full-stack solutions - 3PL/4PLTo capture higher margins for 3PLs, expected due tonetwork centralization & varying oil prices Centralized warehouses reduce overall storagecost while boosting efficiency Variation in oil prices can affect margins fortrucking industryStreamlining return processTo minimize the return cost Increasing number of returns ( 10-12% of thetotal number of orders) Return process to be shortened and simplifiedwith automation and planning inventory spaceaccordinglyNon-essential to essential shiftNeed for more warehousing space, more delivery &handling labor, more automation as essential goodsrequire higher service due to lower value tovolume/weight ratio A category shift is likely from expensive items tobasics due to altered online purchasing behaviorAutomation of warehouse operationsTo reduce dependence on labor IoT for inventory management to facilitateavailability of key parcel information SaaS for Warehouse Management System (WMS)and Transport Management System (TMS) Robotics for lot placement Conveyer belts for automatic sortingExpansion into tier-2 citiesTo service the reverse-migrated population as WFHbecomes the new normal Work from home (WFH) has resulted in aresource shift to smaller towns - increase inlocal consumption of daily requirementsNote:FCQuality– FulfilmentNote(s):of postsCentresis assessed based on quality of image / video, focus on product features, link to purchase, relevance of hashtagsSource(s): Websitereviews,Labs nies, JLL, Knight Frank, Praxis analysisTechnologies that aid business continuityData recovery services and cyber security solutions Besides robotics, software systems drive thebusinessLong-term(up to Mar ‘25)Racking & vertical placement infrastructureTo optimize horizontal space requirement Heavy investment with longer RoI Portability low – poor flexibility of relocationArtificial intelligenceTo manage inventory and order fulfillment Reduction in labor and increased efficiency Time saving in loading/unloading pallet, movingcargo around the warehouse; proves to bebeneficial in basic warehousing operationswhere social distancing norms to be followedIncrease in FC footprint and specialized FCTo cater to more specialized demand of large orders Growing number of orders due to increasingpopulation, purchasing power of rural masses,and orders Setting up regional FCs closer to the end user toincrease speed-to-market Praxis Global Alliance20

Transportation and LogisticsOrganized manufacturing and engineering warehousing stockis expected to grow from 76M sqft in FY20 to 132M sqft in FY25Key highlightsManufacturing and engineering organized warehousing stock (M Y22PGrade A77.012% Manufacturing & Engineering warehousingspace was 76M in FY20 and is expected toreach 132M sqft by FY2512% Grade A & Grade B stocks to grow at 12%CAGR, respectively, till FY2512% Growth expected on account of increasedmanufacturing and engineering activities withrising demand and strong policy push byGovernment55.4FY25PGrade BNotes(s): Othersincludeand ithincumbentmanufacturingplayers, KnightCRISIL, JLL, CBRE, CARE Ratings, Praxis analysisSource(s): Secondary research, PGA Labs analysis'Internet first'brands Praxis Global Alliance21

Transportation and LogisticsSix emerging key opportunities for investment in distributionand warehousing for manufacturing sectorMedium-term(up to Mar ‘22)Automation of warehouse operationsTo reduce dependence on labor in textiles & machinery(including aftermarket) sectors IoT for inventory management SaaS for Warehouse Management System (WMS)& Transport Management System (TMS) Robotics for lot placementCoal stockyardsTo provide larger storage spaces to unified entitiesresulting from M&A 20% (by volume) of thermal coal in India isproduced & supplied by private players – facinginsolvency due to freefalling prices in a leveragedindustry M&A among private players imminent – expecteddemand of better infrastructure coal ompanies,analysisNote(s): Qualityof postsassessed basedon qualityPraxisof image/ video, focus on product features, link to purchase, relevance of hashtagsSource(s): Website reviews, PGA Labs analysisLong-term(up to Mar ‘25)Grade A&B warehouses closer tomanufacturing hubsTo optimize working capital & warehouse rentalcharges for textile & machinery sectors Supply network consolidation resulting insimplification of distribution for bettersupply chain visibility & reduced leakages 65-80% of branded textile playersrelocating to Grade A or B, post GSTCater to new manufacturing hubs that areexpected to be set upExpected benefits from changed global attitudetoward Chinese manufacturing Expected infrastructure investment toenable low-cost, high-quality production Factories moving out of China to reducesupply chain risksPre-fabricated steel warehousesTo provide flexible storage space for warehousingspace intensive commodity businesses Arbitrage-driven stockpiling of commodityraw materials like coal, metals, & chemicals –increase in storage space demand met byassembling of pre-fabricated warehouse onsiteAI-based demand & price predictionTo optimize working capital (inventory for rawmaterial & finished goods) for commodities Margin savings by better inventory &production management in industries likethermal coal, chemicals, & non-ferrous metals Existing inventory levels used as inputs toprediction machine to estimate price forsteel, chemicals, & cement Praxis Global Alliance22

Transportation and LogisticsOrganized auto and auto ancillaries warehousing stock is expectedto grow from 25M sqft in FY20 to 68M sqft in FY25Key highlightsAuto and auto ancillaries organized warehousing stock (M .98.110.610.6FY18FY19FY20FY21P11.313.0Grade A22%13%29.916.640.532% Auto and auto ancillaries warehousing spacewas 25M in FY20 and is expected to reach 68M sqft by FY25 Grade A & Grade B stocks to grow at 32% and13% CAGR, respectively, till FY25 Growth expected due to increase in sales,COVID and BS6-driven pent-up demand, andincreasing car ownership due to socialdistancing requirement13.3FY22PFY25PGrade BNotes(s): wswithincumbentautomobileandcompaniesauto playersparts dealers, Knight Frank, Colliers International, Praxis analysisSource(s): Secondary research, PGA Labs analysis'Internet first'brands Praxis Global Alliance23

Transportation and LogisticsFive key opportunities in warehousing in the automobile sectorShort-term (up to Mar ‘21) to Medium-term (up to Mar ’22)Automation of warehouse operationsTo reduce dependence on labor IoT for inventory management SaaS for Warehouse Management System (WMS) and TransportManagement System (TMS) Robotics for lot placementExpansion into tier-2 citiesTo service the reverse-migrated population as car purchase increases due topent-up demand and social distancing requirements Work from home (WFH) has resulted in a resource shift to smaller towns –increase in demand in Tier 2 citiesLong-term (up to Mar ‘25)Warehousing hubs near manufacturing hubsNew hubs are expected to be set up as India becomes a hub for automobilemanufacturing with increased domestic and export demand Helps manufacturers/suppliers in maintaining centralized inventory Expected investment in R&D by both domestic and foreign players to enableincreased production of low-end and high-end models Electric car boom to further increase ancillary product warehousing demandSecure warehouses near dealerships in Tier 1 cities for high-end carsIncreased demand for high-end cars, especially in Tier 1 cities, with rise indisposable incomeRacking & vertical placement infrastructure for auto ancillariesTo optimize horizontal space requirement Heavy investment with longer RoI Portability low – poor flexibility of relocationSource(s): Interviews with automobile companies, Praxis analysis Praxis Global Alliance24

Transportation and LogisticsSpecific practitioner expertiseMadhur SinghalRahul MehtaPractice LeaderTransportation & LogisticsDomain LeaderTransportation & LogisticsAryaman TandonSavio MonteiroAbhishek MaitiPractice LeaderTransportation & LogisticsSr Vice PresidentTransportation & LogisticsVice PresidentTransportation & LogisticsHowwe helpDigital TransformationCustomer Insight & Brand LoyaltyCost TransformationEnabling our partners navigatethe tectonic digital transformationto deliver growth and operationalefficiencyMeasuring and driving improvement inNPS scores and customer loyaltythrough detailed customer insights andproven frameworksIdentifying sustainable opportunitiesfor profit improvement by focusing onstrategic cost managementour clientsWe have partnered with India'slargest consumer brands andhave helped shape winningstrategies in the continuouslyevolving retail landscapeProcess Re-engineeringProfitability and unit economicsGrowth and Scale UpDesigning and implementingprocesses based on theprinciples of design thinking toenhance customer experienceDeveloping unit economics for any newproduct / market launch and drivingprofitability by operational efficiencyGrowing fast and scaling up byoptimizing client offerings,pricing, promotion, anddistribution to the right target

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About PraxisPraxis Global Alliance is the next-gen management consulting and business research services firm revolutionizing the wayconsulting projects are delivered. We deliver practical solutions to the toughest business problems, by uniquely combiningdomain practitioner expertise, AI-led research approaches, and digital technologies.(FIG) Pre-deal support,commercial due diligence,post-acquisition value creation(BET) Next-genpractitioner-led businessadvisory and consultingoffering lean-cost and longduration engagementWe work with agility,flexibility and embed withyour teams to enableSUPERIOR OUTCOMESBusinessDataTechnologyDataengineeringand analytics,AI, ML, OpenData andvisualizationsolutionsWe leverage technologydeeply to enable higherROI on your consultingand analytics spendCutting-edgetechnology- ledbusiness andmarket researchand toolsWe bring the best domainexpertise with our deep pool ofindustry practitioners andimplementation teams astwo-in-a-boxOrganizationand TalenteffectivenessPraxis is ‘Practical’

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Connect with usWe will be happy to share perspectivesAryaman TandonFor Media Queries, Please ContactManaging Partner & Co-founderPraxis Global AllianceMadhur SinghalManaging Partner & CEOPraxis Global AllianceGurugram IMumbai IBengaluruParul SinghhDiksha BhutaniHead - Corporate C

an overall perspective on the key warehousing trends and emerging opportunities as the economy is witnessing recovery post a nation-wide lockdown that started on 22nd March 2020. In the report, we have also discussed impact of COVID-19 on the Warehousing segment. We also discuss where is India in terms of the warehousing space as compared to other