Demand surges 40% in 3 years

What is a dark store?

A dark store is a small warehousing urban distribution centre exclusively for online shopping with an area ranging between 3,000 to 8,000 sq ft located close to densely packed residential areas to meet quick delivery requirements, Srinivas N, Managing Director, Industrial and Logistics, Savills India said.

Dark stores stock a variety of products and operate around the clock. This enables quick access to inventory, reduces transportation costs, has a quick turn-around time, and improves last-mile delivery capabilities.

However, unlike warehousing, dark stores maintain a limited inventory, often with products having a shelf life of less than 24 hours. In contrast, warehouses store a wide variety of materials in bulk quantities, without the same time constraints on product freshness or expiration.

“The current requirements from quick commerce necessitate dark store spaces of 5,000 square feet or larger. The evolution of quick commerce has managed to establish a firm foothold in the market, which indicates a likely increase in the number of these larger stores moving forward,” Abhishek Bhutani, Managing Director, Ahmedabad and Logistics & Industrials, Cushman & Wakefield said.

Where are dark stores usually located?

A 2021 study by JLL showed that in the e-commerce sector, about 10-15 percent of total kilometres travelled in urban areas contributed to 47 percent of total transportation costs.

This brought dark stores closer to the dense residential areas to ensure efficient and timely delivery. However, real estate costs in urban locations cannot meet retail rental expectations. Therefore, dark stores are usually located in smaller commercial building basements, parking spaces, and defunct facilities in the bylanes or alleyways.

Additionally, these stores are not visited by customers. So, low-cost space is most functional for a dark store.

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