The e-commerce industry in Europe is set to double over the next five years, according to research published by industrial real estate company Prologis Inc. This substantial growth is expected to affect supply chains, facilities and talent that support the critical functions of e-fulfilment and logistics.
A key discovery in Prologis’s research revealed that growth in e-commerce over the last three years has translated into 5 million m2 of new e-fulfillment space, driving job growth in key logistics hotspots.
Significantly, Poland was identified as one of the most important market in the e-commerce sector. The e-commerce market in Poland is developing rapidly and has become a relevant retail channel. The market value of e-commerce was registered at €400 mln in 2004, while increasing to €8 bln 10 years later in 2014.
Poland, as one of the top five major markets for e-commerce in Europe (alongside the UK, France, Germany and the Czech Republic) represents 13% of Europe’s e-commerce direct leasing agreements and drives job growth. The relatively low cost of operating in Poland is one of the reasons for its high ranking.
The research showed how complementary industries, such as logistics real estate that serve as a backbone to e-commerce, will continue to benefit. Furthermore, review of e-fulfilment strategies and customer location preference based on a deep analysis of individual leases showed that for every €1 billion in new e-commerce sales, 77,000 m2 of new logistics real estate was needed to fulfill those orders. Looking ahead, the implications that follow include:
- Job growth: 200,000 new jobs will be needed to staff new e-commerce facilities over the next five years; this translates to 100 jobs per day.
- Multiplier effects: The e-commerce industry will need an additional 15 million square metres of logistics space during the next five years as online sales and shipping volumes grow significantly.
- Location: Facilities in Europe’s largest e-commerce markets, such as the U.K., Germany and France, as well as growth pockets like Poland, Czech Republic and the Netherlands, are the current hotspots.
The research also demonstrated how complementary industries, such as logistics real estate that serves as a backbone to e-commerce, will continue to benefit.
“In the past three years, e-commerce leases accounted for 15% of total leasing volume and we expect this ratio to rise further as more companies expand their e-fulfilment capabilities,” said Chris Caton, senior vice president, Prologis Research.
“Most growth is expected to occur in Europe’s three largest e-commerce markets, the UK, Germany and France, which could account for approximately 10 million m2 alone.”
