How Welspun’s BK Goenka looks to ride the quick commerce wave

In December 2019, the $2.7 billion Welspun Group quietly entered India's rapidly evolving warehousing sector with a strategic acquisition through promoter Balkrishan Goenka's (BK) family office. By securing a majority stake in One Industrial Spaces, a company founded by logistics veteran Anshul Singhal just months earlier, Goenka family positioned itself to tap the country’s booming quick commerce sector. Under the new banner of Welspun One, the platform is not just expanding India's warehousing footprint but also riding the quick commerce wave that is reshaping how goods are moved and delivered across the country.

Balkrishan Goenka, chairman of Welspun World, this was a calculated bet on the future of logistics in India. "Today, people expect everything in 15 minutes—groceries, tickets, clothes. The entire value chain is evolving around that expectation," Goenka tells Fortune India. "But we don’t need to eat the whole pie. We can’t become a Blinkit or a quick commerce company, but we have to be somewhere in the value chain. They need warehousing, and that’s where we come in," elaborates Goenka.

Welspun One has raised ₹2,775 crore through two funds, supported by around 1,000 unique domestic investors, including high-net-worth individuals (HNIs), family offices, and prominent institutions. The platform also has ₹800 crore in dry powder to achieve its target of 18-20 million sq. ft. of warehousing space in the near future. 

New-Age Warehousing

According to the NIQ Shopper Trends 2024 Report, 31% of urban Indians now use quick commerce platforms, underscoring the rapid adoption of instant delivery services. These platforms, which specialise in ultra-fast delivery of products, particularly groceries and essentials, have been driving India’s eCommerce transformation. A report from Redseer highlights the opportunity: the quick commerce market in India grew by 77% year-on-year in 2023, reaching $2.8 billion in gross merchandise value. Though it currently accounts for 5% of India’s eCommerce market, the potential for expansion is enormous.

Karan Taurani of Elara Securities echoes this sentiment. "Q-commerce may account for 40-50% of eCommerce in some categories over the next three years, whereas it currently accounts for 10-15% of the total eCommerce segment," mentions Taurani in a report that predicts the continued rise of instant delivery services.

For Goenka, these numbers are signals of an impending logistics revolution that Welspun One can tap. "Money isn’t the issue anymore, whether it’s private equity or other sources. The two key challenges are manpower and land. We’ve put plants in every nook and corner of the country. We know how to buy land, and more importantly, how to construct facilities at the lowest possible cost,” says Goenka.

Quick commerce is transforming not just how goods are sold but also how they are stored and distributed. Traditionally, warehouses were located outside major cities, on large tracts of land far from consumers. But the insta commerce model requires something fundamentally different: smaller, in-city warehouses capable of supporting 15-minute deliveries. For Welspun One, this shift has meant rethinking logistics from the ground up.

Playing it right

Traditionally, warehouses have been situated on the outskirts of cities—massive hubs in Bhiwandi, Gurgaon, or along the Jaipur highway. These locations offer scale but are often far from consumers. However, as Goenka observes, the rise of quick commerce has brought about a seismic shift. Today, warehouses must move closer to the city, and that proximity requires expertise in both land acquisition and development.

Welspun One boasts a warehousing portfolio of around 11 assets with a development potential of approximately 14.2 million sq. ft. These are located across key geographies, including Mumbai, NCR, Chennai, Bengaluru, and Lucknow, ensuring broad access to major markets and urban centres.

In places such as Thane and Navi Mumbai, Welspun One has struck strategic collaborations to build integrated logistics hubs. These hubs are not just warehouses; they also include cold storage facilities and even office spaces, designed to handle the myriad demands of quick commerce and the growing needs of Indian businesses. Its flagship asset is a 110-acre Grade-A logistics park in Bhiwandi, Maharashtra — the hub of Mumbai’s warehousing market.

"You can’t afford to build such warehouses inside the city, especially given Mumbai real estate costs. Warehousing rents are different — you’re talking about ₹30-25 per square foot, sometimes as low as ₹18. So, you have to play smart and get the right kind of land at the right price," explains Goenka.

While the company won't venture into the dark store model, the focus will be on creating large hubs in 10-15 key locations, with smaller distribution points extending from those hubs. "You can't rely on tiny spaces like 500 to 600 square feet, especially with the high cost of land in places like Mumbai. It's a significant challenge and demands a different level of expertise,” says Goenka.

Build to last

Operating as an integrated fund and development management platform specialising in Grade-A warehousing and industrial parks, the company's model encompasses everything from capital raising to project execution, delivering exceptional returns for investors. With clients from sectors such as 3PL, eCommerce, retail, and FMCG, Welspun One has a diversified tenant base, making it a critical partner in the logistics ecosystem.

While Welspun One is looking at 30 million square feet of warehousing by 2027, Goenka knows that long-term success requires something more than just scale; it requires credibility. "We gave 18% return to our investors…that builds trust and creates long-term goodwill,” says Goenka.

Welspun One managing director Anshul Singhal brings industry knowledge to the table through stints at Blackstone, Warburg Pincus, and Brookfield, having overseen development of large-scale warehousing and logistics solutions.