Impact of e-commerce trend on Indian real estate

E-commerce trend is both an opportunity and threat. The e-commerce business is impacting real estate industry differently in many ways. When it comes to housing market, the higher than average salary including encashment of stock options is fuelling either purchase or renting of houses. The employees are aspiring to locate themselves in upper segment of the residential locality with modern amenities. The employees are being recruited across the country to service the customers and hence real estate is rising in the cities which are strategically placed for servicing the regions. GST has certainly accelerated the e-commerce business due to uniform tax structure across the country. Similarly, the e-commerce has witnessed many real estate portals that are reaching out to the new millennium on a concentrated targeted basis and based on the response is able to follow it up with personal contact. The real estate brokers are realigning their marketing and sales strategy considering the trend of e-commerce industry. When it comes to, commercial space, the e-commerce is having the maximum impact. On one spectrum is warehousing facilities and other spectrum is data centres for processing big data. The e-commerce no longer are willing to pay very high rentals nor are they content with sub-optimal ware housing space. The likes of Amazon, flipkart, etc are seeking warehousing space considering the scale of operations including automation, number of stock units, ability to operate round the clock, effective power cost, all weather proof accessible locations and so on. Similarly, the e-commerce has opened up real estate development in non-metro cities that provide educated work force, good environment and governance by the authorities, telecommunication etc. Historically, the physical infrastructure would have been created to cater to the local population and to some extent the tourist inflow. Now, since there are no boundaries as far as e-commerce is concerned, the real estate expansion or collapse will be function of how efficient that city serves the e-commerce industry. In nut shell, e-commerce is redefining/ reshaping the real estate industry. Co-sharing work space is redefining the commercial real estate and is on the rise as many e-commerce players are building technology and outsourcing everything else. They are operating out of such co-working space. Similarly considering the price at which the products are sold on online and consequently the margin in hands of brick and mortar shops, many of the retail malls and standalone stores are redefining themselves. The malls are being redesigned considering the consumer behaviour including need for entertainment, social networking, etc. The online banking, payment wallet, ATMs etc has redefined as to how many physical bank branches needs to be there. E-commerce has played a great role on how banks are shaping themselves for the time to come and consequently the real estate space for banks will undergo significant change over coming years.