E-commerce: The Impact of Deliveries in Less than 24 Hours on Logistics Chains and the Real Estate Market
- Same-day delivery, a burgeoning e-commerce service, has sparked an unprecedented surge in Brazilian real estate and logistics sectors. Yet, this business strategy grapples with significant challenges in operational efficiency, environmental sustainability, proper infrastructure, and strategic property location
In the digital age, where immediacy has emerged as an aggregate value to entice consumers, e-commerce businesses in Brazil have embraced a strategy that, albeit ambitious, is reshaping our shopping habits: same-day delivery. But what does this strategy mean for supply chains, the commercial real estate market, and logistics in the country?
The principle of same-day delivery pertains to an e-commerce company's ability to process, prepare, and deliver an order to the customer within a 24-hour window from the time of purchase. This efficiency caters to the customer's immediate demands and stands as a differentiator in a fiercely competitive sector. Its ramifications for logistics and supply chains are significant.
To ensure swift or ultra-fast deliveries, these companies lean on strategically located distribution centers, efficient transportation fleets, and advanced management systems. This has spurred industrial spaces and warehouse demand in key locations, particularly near densely populated urban areas, aiming to minimize transit times.
Since 2020, the e-commerce surge has been accentuated due to mobility restrictions from the COVID-19 pandemic. Data from SiiLA reveals that, between Q3 2020 and Q3 2023, the Gross Leasable Area (GLA) occupied by e-commerce companies, including giants like Amazon, and Mercado Livre, rose by 84%. Additionally, the industrial space in the transport & logistics sector grew by 46%.
Real Estate Developments and Challenges in Brazil Due to E-commerce
The commercial real estate market is witnessing unprecedented growth. Developers are investing in state-of-the-art infrastructures tailored to e-commerce businesses. These include high-ceiling spaces for optimized vertical storage, efficient loading and unloading zones, and advanced security systems.
According to SiiLA Market Analytics, e-commerce companies prefer to operate in industrial properties instead of isolated warehouses, and generally seek assets with international construction standards, high quality and, most importantly, with a strategic location, with easy access to the country's consumer centers. This last characteristic explains the strong concentration of assets in the Southeast of the country, which houses 76.88% of the total stock.
Global Trend
Same-day delivery has revolutionized e-commerce not only in Brazil, but around the world, having a direct impact on logistics and the commercial real estate market. While consumers benefit, businesses need help to ensure this practice remains sustainable and efficient for a long time.
Undoubtedly, the primary challenge lies in maintaining operational efficiency and customer satisfaction. Any hiccup in the supply chain can result in delayed deliveries, potentially eroding consumer trust and brand reputation. Moreover, the e-commerce boom demands consistent technological investment and trained personnel to manage these advanced systems.
Environmental sustainability is another hurdle. Rapid deliveries, though convenient, might elevate carbon footprints due to more individual trips versus consolidated deliveries. Companies must balance offering top-tier services and social responsibility, considering alternatives like electric vehicles and route optimization systems.
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