News Services

Supply chain firm Prozo to add one million sq ft warehousing space every year


Supply chain firm Prozo aims to expand its warehousing space to 5 million sq ft within three years, up from the current 1.5 million sq ft, in response to brand demands for fulfillment centers to address multichannel demand, Ashvini Jakhar, founder and CEO of the company told ET.

“We will have 70-100 warehouses, depending on which sizes we go ahead with and how the demand pans out. We have developed that expertise and set up close to 25 warehouses in the last 11 to 12 months,” Jakhar said.

Established in 2015 and headquartered in Gurgaon, the company has successfully secured funds totalling Rs 131 crores to date from investors such as Sixth Sense Ventures, JAFCO Asia, among others.

It is expected to invest Rs 50 crore every year to expand the warehousing presence.

“Brands are going through a very unique situation right now, as the demand side is fragmenting quite a bit. Multiple channels of demand have opened up and every brand has to serve demand from all of these channels. Brands are now facing a tenfold increase in complexity as the number of channels has multiplied from three to thirty, even though the demand has only risen by 10 or 20% for every one rupee,” said Jakhar.

“Now that is putting a lot of pressure on the supply chain. Cost of customer acquisition is increasing for brands and margins are shrinking. We are building an operating system of supply chain that helps brands address each of these key challenges and pain points,” he added. Prozo, with its extensive network of over 30 multi-channel warehouses spanning across India, along with a logistics network covering 20,000 pin codes, is strategically preparing for a substantial series B funding round in the fiscal year 2023-2024. The company’s primary focus will be on tier 2 cities, recognising the significant shift in demand towards those regions.

“Brands are working hard to find demand hotspots and they are finding those demand hotspots in tier 2 cities. In metros, the demand is still subdued, a lot of layoffs that have happened, appraisals have not been that well. A lot of tier 2 cities are emerging as tier 1 because of this,” the executive said.

Industrial and warehousing sector recorded a total absorption of 22.4 million sq. ft., indicating a 7% increase compared to the 20.9 million sq. ft. absorbed in the first half of 2022. Tier I cities accounted for 75% of the total absorption in the first half of 2023, while tier II and III contributed the remaining 25%.

The industrial and warehousing sector also witnessed a new supply of 27.4 million sq. ft. during the same period, reflecting a 36% growth from the 20.2 million sq. ft. recorded in the first half of 2022, according to the latest research by Savills India, a real estate advisory firm.

Prozo is currently managing supply chains for over 100 companies including Reliance JioMart, Urban Ladder, MPL, Hyundai, Butterfly Appliances, McGraw Hill, Wonderchef, LEAP, Treebo, Tata Consumer Services, Aditya Birla Group, Snapdeal, Fancode across 12 locations.


Source link