The e-commerce boom is a major driver of warehouse demand in larger geographies like Australia, China, USA and Europe, where rising requirements for faster deliveries have fuelled the construction of last-mile fulfilment and consolidation centres.

While the e-commerce boom has contributed to the demand for warehouses and driven new construction in Singapore, the impact has been less pronounced.

We take a closer look at the impact of e-commerce in the Singapore market:

1.  Generate demand for warehouse space

Due to business growth, some e-sellers have expanded their physical warehouse footprints in Singapore.

For example, in 2017, online luxury retailer Reebonz opened an eight-storey, 200,000 sqft e-commerce hub with a centralised distribution centre that was four times larger than its previous office and distribution centre.

Online grocery store RedMart also grew its warehouse from 3,000 sqft in 2011, to its current 150,000 sqft premises at Fishery Port Road.

Meanwhile, the entry of new players also contributed to warehouse demand. Amazon set up a 100,000 sqft warehouse at Mapletree Logistics Hub Toh Guan when it launched its same-day Prime Now delivery service in 2017. It has since taken up more space to meet demand from its new Amazon.sg website.

2.  Development of dedicated e-commerce facilities

Some third-party logistics service providers (3PLs) and landlords also invested in dedicated e-commerce facilities to cater to rising requirements from e-commerce firms.

The latest to join the bandwagon is LOGOS, which is developing a 1.3 million sqft gross floor area, seven-storey ramp up eCommerce Hub at 4 Pandan Crescent. Scheduled for full completion in 2023, LOGOS has already secured Ninja Logistics and Avant Logistic Service as tenants.

It will join the likes of the 553,000 sqft SingPost Regional eCommerce Logistics Hub which opened in 2016 featuring 150 simultaneous loading bays, and the SGD 21 million 65,000 sqft eCommerce AirHub unveiled in 2017 by SATS, a Singapore airfreight terminal operator.

3.  Smarter warehouses

The e-commerce boom has also made Singapore’s warehouses “smarter” as landlords, 3PLs and e-sellers invest in technology and automation to improve warehouse operational efficiency and facilitate faster deliveries.

NTUC FairPrice is a case in point. In 2018, the supermarket chain launched a refreshed mobile app and online portal, as well as its “AutoStore”, an automated warehouse storage and retrieval system, to provide online customers with an enhanced e-shopping experience and faster deliveries.

Additionally, at the three-storey SingPost Regional eCommerce Logistics Hub, its fully automated parcel sorting facility can handle up to 100,000 parcels a day, with end-to-end sorting, shipping and returns management capabilities, enabling quicker order fulfilment.

Likewise, the upcoming LOGOS eCommerce Hub will be designed with the flexibility to accommodate a wide spectrum of e-commerce uses, including conventional racking systems, and high-density storage and automated sortation systems.

To conclude, due to Singapore’s land scarcity, the focus has been on raising industrial land productivity. Moreover, last-mile challenges often involve manpower shortages and delivery delays rather than travelling distance.

Hence, while warehouse demand and new construction has been relatively muted relative to larger markets, e-commerce growth has and should continue to drive more stakeholders to gear up their warehouse operational efficiency through embracing Industry 4.0 initiatives to meet rising last-mile fulfilment requirements.

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