The Relationship Between the Global E-Commerce, Warehousing and Storage Markets

By Oleg Mikhailenko
Published in E-Commerce Market
March 10, 2022
2 min read
The Relationship Between the Global E-Commerce, Warehousing and Storage Markets

The global e-commerce industry is expected to break 5 trillion dollars for the first time in 2022.

The size of the market itself has doubled in less than five years, partially due to the Covid-19 pandemic and associated lockdown measures. This astounding growth, however, has a price - over 6 billion more square feet of storage and warehouse space will be needed between now and 2025 in order for this boom to be sustainable.

The internet has completely transformed e-commerce today. Anyone can put their products in the public eye on a scale that would have been considered impossible at any sort of economically feasible rate. In 2022 alone, it’s estimated these companies and individuals will sell over 5 trillion US dollars worth of products and services. For perspective, the global automobile manufacturing industry is expected to “only” total 2.7 trillion in the same period.

As the e-commerce market continues to grow at extraordinary speeds and break records year after year, one of the related resources that has to grow alongside it are the warehouses used to facilitate sales. Estimates calculate that by 2025, storage will need to be increased by 25% in order to keep pace with the mounting demand. That’s 6 billion extra square feet between where we are and where we need to be.

It’s clear the world needs to establish more warehousing, and fast. The potential environmental impact of building so much new storage alone is concerning, let alone the logistical problems such a huge project would bring about. Is there a happy medium that gives us the best of both worlds?

The obvious answer is ensuring pre-existing warehouses are used as efficiently as possible. If the space that’s already there can be better utilized, this action in and of itself will generate a lot of spare room. However, many warehouses are already well-managed. Eking out an extra 25% is a difficult prospect.

The same estimates predicting the need for 25% more e-commerce related warehousing and storage tell us the world has around 831 billion square feet of non-warehouse commercial space. Considering the massive changes in the world due to the recent pandemic, could it be possible for some part of this space to be re-appropriated for the storage of e-commerce related goods? A recent survey of 400 North American companies says they expect to cut their office footprint by between 11 and 40%. With so much potentially empty office space available, much of it easily convertible into light warehousing, why build something new when it’s possible to simply use what’s already available?

Additionally, more people are looking to earn a living on their own terms, breaking away from the traditional 9-to-5. If folks have the opportunity to offset their living expenses by utilizing part of their garage for the storage of goods, then additional warehouse capacity can be acquired without creating any new buildings. In return, the owner is paid for their trouble, without ever having to step foot outside their homes.

It’s clear the e-commerce industry is going to have a major impact on global storage and warehousing in the near future. We now have to decide whether conventional warehousing will be the solution, or whether a more ecologically sound shared economy approach, as is in the case with other industries, is the way forward.


Tags

#e-commerce#warehousing#growing#growth#unprecedented
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People (The Other Missing Resource in the Growing E-Commerce Market)

Oleg Mikhailenko

Co-Founder, CEO P2Pseller

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