Godrej Körber Supply Chain firmly set to Perform well in India’s Warehouse Automation & Management Market

Godrej Körber Supply Chain Limited, a joint venture between Godrej & Boyce Mfg Co Ltd, India, and Körber AG, Germany, has exceeded order intake targets with order books full in FY22, in India’s warehouse automation & management market. With this, Körber Supply Chain intends to increase investments in India through its Indian subsidiary, Godrej Körber in FY23.

Quadrant Knowledge Solutions, as a leading market research and analyst firm, closely tracks information about the performance of the leading technology solution suppliers. One among the companies that are on its radar screen is Körber, which according to the report ‘SPARK Matrix™: Warehouse Management System, 2022’ is in the top three brackets of the technology leaders in the global WMS market.

Körber, having come to the conclusion, based on its understanding of the global supply chain management and warehouse automation market, that India would be one among the best markets for its warehouse automation and management solutions, established its presence in the country through a joint venture company, the Godrej Körber Supply Chain Limited. The joint venture is between Godrej & Boyce Mfg Co Ltd, India and Körber AG, Germany. Godrej & Boyce, a Godrej Group company, founded in 1897, is in 14 businesses across various sectors such as Security, Furniture, Aerospace, Infrastructure, and Defense. Körber, started in 1946, is in Digital, Pharma, Supply Chain, Tissue, and Tobacco businesses. Körber Business Area Supply Chain’s offerings include software, automation, voice solutions, mobility & robotics, and material handling.

That the decision of Körber to enter the Indian Market, taken a few years back, is indeed a rewarding decision is borne out by the following company-specific developments and evolving overall business scenario.

Recent performance & future outlook

The annual report of the Godrej Körber Supply Chain Limited, for the year ended 31^st March, 2022, highlights the following achievements and the future growth prospects: these observations establish that Körber’ decision to enter the Indian market in partnership with Godrej & Boyce was indeed the right one.

• The company’s March 2022 ending revenue and profit after tax grew by about 40 percent and 60 percent respectively

• The robust enquiry pipeline for the year as well as the growing demand for automation in the supply chain arena will help to sustain the company’s momentum for growth and increase in profits in the coming year also                                                                          
• The company’s enquiry pipeline for automation and setting up of consolidated warehouses by many customers in the Manufacturing / Fast Moving Consumer Goods / Pharma sectors continues to show robustness. This resurgence in demand gives the company the confidence for future growth in 2022-23 and beyond.           

The above information triggered us to explore the dynamics of the warehouse market developments in India and the positioning of Körber Business Area Supply Chain in the country.

The expectations of the company about the growth prospects in India are well-founded and supported by the following projections.

India’s E-commerce industry growth projections

According to ‘Indian E-commerce Industry Analysis’ published by India Brand Equity Foundation (IBEF),  Department of Commerce, Ministry of Commerce and Industry, Government of India, India has the third-largest online shopper base of 150 million and the same is expected to rise to 350 million by the year 2026. The same report also predicts the country’s E-commerce business to grow in double digits and reach US$ 350 billion by 2030. By the same year, the country’s online retail market is expected to reach 37 percent of the total organized retail market from the present 25 percent. 

Due to the upsurge in the E-commerce business, the annual warehousing space absorption in the top eight Indian cities will increase from 31.7 million sq. ft. in 2021 to 76.2 million sq. ft. by 2026. For the same reason, the Indian market is witnessing the entry of a number of players with massive investment plans. In 2021, India’s E-commerce sector got US$ 15 billion in private equity / venture capital investments, a 5.4-fold increase over the previous year.

According to the London & Partners analysis, India has become the second-largest global venture capital investment hub for digital shopping companies in 2021 after the US. The Indian E-commerce segment registered a whopping growth rate of 175 percent and reached $22 billion from $8 billion in 2020.

E-commerce related business segments’ potential 

Some of the business segments/categories that are the major contributors to the growth of the E-commerce industry and warehouse market are retail, fast-moving consumer goods, processed food, pharmaceuticals, and electronics; according to numerous published reports, their growth prospects are very promising. 

• About India’s retail, fast-moving consumer goods, and processed food markets, IBEF states the following:
  • The retail market in India, growing in excess of 20-25 percent per annum, is valued at around US$ 1.1 trillion
  • The consumption-led fast moving consumer goods market in India is expected to increase at a CAGR of 14.9 percent and reach US$ 220 billion by 2025
  • The Indian processed food market is projected to expand to US$ 470 billion by 2025, up from US$ 263 billion in 2019-20.
  • India is the largest milk producer in the world and this is as per the report published by the Food and Agriculture Organization of the United Nations. The report states that India accounts for 22 percent of global milk production, which increased by more than 50 percent, from 530 million tons in 1988 to 843 million tons in 2018.

• The INVEST INDIA, investment promotional agency, Government of India, proclaims that

the Indian pharmaceuticals industry ranks 3^rd in the world in terms of volume of production and      4^th by production value. The country is the largest provider of generic medicines globally

• The Indian Manufacturing sector currently contributes 16-17 percent to the country’s GDP. India, with a nominal GDP of US$ 3.2, trillion recently emerged as the fifth largest economy in the world, the announcement of which was recently made by the International Monetary Fund.

A company has to be at the right place with the right products at the right time and price to be successful in the marketplace. It is all the better, if the company can find the right partner to work with and foresee the growth opportunities as they emerge and act in anticipation to benefit from them. Körber seems to have followed this approach and is reaping the benefits. The country’s E-commerce growth projections, forecasts of the E-commerce related business segments, and the company’s performance provide positive indicators.

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