The growth has taken place despite the fact that logistics facilities specifically designed to support the industry are poorly suited to the uses of e-tailers, having been designed rather generically.
Given this undersupply, Razvan Iorgu, Managing Director at CBRE Romania, says the demand for specialist logistics buildings will grow “both at the larger end of the size spectrum and on a smaller scale, closer to the final point of consumption.”
Iorgu says such logistics facilities are unique in terms of their labor requirements, proximity to multiple delivery destinations, process capability and their ability to integrate with parcel delivery networks. “Online retailing creates a need for logistics networks and buildings to accommodate a different and more fluid set of demands,” he says.
But e-tailing is still a young industry, and the real estate that’s supporting it is mostly still on the drawing board. One of the few e-tailers which has chosen to base itself in a logistics park is eMAG.ro. In 2011, it began with 4,600 sqm of space at Cefin, an industrial park to the west of Bucharest. It then tripled the size of its facility last year in two stages (first by 4,200 sqm and then added an additional 4,750 sqm) to prepare for Black Friday, the busiest day of the year for e-tailers which takes place in November.
For CEL.ro, another prominent e-tailer, last year began more positively than this one has. “Our orders doubled in 2012 compared to 2011, while our turnover increased by 70 percent, from €11.7m in 2011 to €20m last year,” says Tiberiu Pop, Corsar Online‘s (CEL.ro) manager. “Unfortunately, consumption has decreased 20 percent across the entire market this year. We expected the first three months to bring month-on-month growth, as in previous years, but the reality was completely different.” Despite that, Pop is estimating a “modest” increase in sales of 10 to 20 percent compared to 2012. CEL.ro’s storage is located entirely in western Bucharest in a former garment factory.
“Based on the calculations we’ve made, we would have expected to expand our storage space this year but as the market situation is not very good, I have delayed making a decision until things get back to normal,” Pop says.
evoMAG.ro has also placed its expansion plans on standby and claims the key to its success is its warehouse space strategically located in central Bucharest, says Mihai Patrascu, CEO at evoMAG.ro. The e-tailer’s sales increased last year by 37 percent compared to 2011 and expects a similar results this year.
Even Romania‘s hypermarkets are getting into the game. Cora has coradigital.ro, for IT products and electronic home appliances, while Metro runs its own online shop. More recently, Carrefour launched Carrefour-online.ro in April, but this is only serving Bucharest and its outskirts for the time being. (source: cijjournal.com)
