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The announcement that 100 per cent FDI will now be allowed in e-commerce is going to open the floodgates to a host of other players in this sector, said Anuj Puri, Chairman & Country Head, JLL India.
“As already the country is a host to some of the largest global e-commerce players and the impact that this development will have on Indian real estate will be significant,” he added.
In the first place, new players - like their predecessors - will require large office space to house their back-end teams. They will naturally direct this requirement to the country's top seven cities.
The second impact will be on the demand for warehousing and logistics real estate. Unlike the demand for office space, this additional requirement will be spread fairly evenly across Indian cities.
E-commerce players need to be able to deliver quickly to their customers, and one of the most important clientele segments for them are in the tier 2 and tier 3 cities.
“We will therefore see a significant step-up in demand for warehousing spaces in and around these cities,” said Puri.
On the flip side, there has been a rider clause attached to the FDI liberalisation on e-commerce which says e-commerce players now will be unable to sell below market prices and not more than 25 per cent of sales will happen via one vendor (this proviso does raise a question about the term ‘market price’, given that there is fairly broad accepted range for most products).
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