It is expected that the e-commerce industry in Vietnam will grow at an annual rate of 30% during the period from 2021 to 2025. The number reflects the expansion of online trading platforms and the demand of consumers for a better purchasing process. Retailers have struggled with processing customers’ online orders because of their rising expectations for faster delivery. Small warehouses are important links in the supply chain that help improve the problems. As a result, demand for automated small warehouse in Vietnam has increased recently and also since they can help businesses gain competitive advantages and attract more customers.
Why Invest in A Small-Sized Warehouse for Rent in Vietnam?
The Trends in Warehousing
Small or micro warehousing is known as a small storage that is often located in densely-populated areas or metropolises where the square footage is too expensive for a large warehouse. Small warehouses in Vietnam are usually below 200,000 m2 and lots of enterprises are looking for spaces of only 50,000 m2.
Currently, Vietnam is promoting the rental of small warehouses, especially those that are equipped with robotics and automation systems. Perhaps the size of a warehouse does matter when it comes to the e-commerce industry. Large-sized warehouses are not as sought after as small warehouses. In reality, the availability of small storage units is at a low vacancy rate because of the increasing demand. The rental rate of smaller-sized warehouses has risen significantly in the last 3 years.
Lots of businesses ask for small warehouse in Vietnam, and it is expected that international firms will invest more in Vietnam’s small warehouse network in the northern provinces. In particular, Hai Phong and Quang Ninh are the main destinations for large warehousing projects thanks to their advantages in geographical location.
The Benefits of Small Warehouse in Vietnam for The E-commerce Industry
In the world where people can do every task on a small screen, consumers expect products they order online through platforms to be delivered as fast as possible no matter how much the shipping cost is. Consequently, businesses are having difficulty procuring the stuff they regularly sell due to weaknesses in their supply chains.
Small warehouses with advanced technology will be the most effective solution for businesses when dealing with problems arising from consumer expectations. There are some benefits to micro-storage facilities as below.
1. Warehouse Space Reduction
Because online retailers typically have limited storage space, it’s critical for sellers to have high-density solutions for an efficient in-store fulfillment process. Large warehouses seem to not meet their requirements, as they only need an appropriate place to control their orders. Excess capacity in a warehouse can worsen a business’s performance.
2. Supply Chain Optimization
For online sellers, one of the most difficult things is warehouse management and delivery to the last-mile customers. Because it has a direct impact on their customer retention and brand image, solutions for fast deliveries need to be found to remain in business competition.
In these difficult situations, small warehouse in Vietnam help retailers locate products closer to consumers, thus enabling prompt delivery and in-person pick up.
For e-commerce enterprises, one of the main advantages of renting smaller warehouses is the ability to build customer fulfillment centers in densely populated metropolitan areas, which implies shorter delivery times, fresher produce, and more customized customer care.
3. Ability to Compete with Key Players
Small-scale warehouses are well-suited to small and medium-sized businesses. The supply chain has already been disrupted by retail giants, making it difficult for small e-commerce retailers to stay competitive. Micro warehousing in e-commerce helps businesses to stay on top of the competition, which is especially important when it comes to selling identical items.
However, due to the nature of their products and extra restrictions, not all companies will be able to fully profit from this choice, but it does provide the luxury of competing with major names. Overall, micro warehousing is still one of the most effective ways for small businesses to get momentum and strengthen customer connections.
4. Improving The Customer Experience
If delivery expectations are satisfied, the value of a product or a brand improves by a factor of ten. Micro warehousing can help a firm with that. The fact is that the customer experience is heavily influenced by same-day or next-day deliveries. Furthermore, the shorter distance between the product and the customer guarantees that it reaches them in the best possible condition, avoiding several transits. Furthermore, a well-organized fulfillment system allows for the personalization of deliveries in accordance with customer preferences.
5. Cost Reduction
The automated small warehouse in Vietnam will not only help firms deliver on time, but it will also save costs.
One of the most significant advantages of switching to a micro fulfillment center is the significant reduction in transportation expenses. With limited resources and logistics network restrictions, managing end-customer deliveries on your own might raise operating expenses and reduce efficiency. The money saved from the external fulfillment and warehousing solutions might be utilized to help the company develop even faster.
In addition, small-scale warehouses can optimize investment costs. The first is a reduction in the cost of premise rental. This will save a significant amount of money for businesses that rent workshops. Small warehouses for rent can also help businesses save money on repairs and refurbishment. Restoration expenses are computed based on the size of the project. The expense of restoring a large plant will be higher. As a result, small businesses will save money on upkeep.
Small Sized Warehouse for Lease in Vietnam
There are significant differences in warehouses among separate regions in Vietnam. Understanding the difficulty of companies when choosing a suitable warehouse for their operations, Savills Industrial provides various small-sized warehouses for rent in Vietnam and also provides consulting services for leasing warehouses.
Small Warehouses in The South of Vietnam
– Location: Long Thanh District, Dong Nai Province
– Total area: 60,000 m²
– Vacant area: 36,000 m²
– Price: $5/m²
– Key features:
+ Full completed infrastructure system (Japanese standards)
+ Strategic location: 54km from HCMC, 51km from Tan Son Nhat international airport, 38km from Cat Lai port
+ Convenient traffic system
+ Loading capacity: 5t/m2
– Location: Can Giuoc District, Long An Province
– Total area: 17,680 m²
– Vacant area: 9,984 m²
– Price: $5/m²
– Key features:
+ Flexible unit size
+ Quality building specifications
+ Suitable for FMCG, e-commerce and logisticso
+ Easy to access location: 25km from HCMC, 27km to Tan Son Nhat Airport
+ Loading capacity: 2t/m2o
+ Ceiling height: 12.9m
Small Warehouses in The North of Vietnam
– Location: Tu Son, Bac Ninh Province
– Total area: 100,000 m²
– Vacant area: 18,800 m²
– Price: $5/m²
– Key features:
+ Designed to allow for product movement and/or storage
+ Smart LED lighting
+ Rainwater capture
+ Skylights in roof
– Location: Yen Phong, Bac Ninh
– Total area: 150,000 m²
– Vacant area: 69,000 m²
– Price: Contact
– Key features:
+ “One-stop” services
+ Profession staff
+ Designed to maximize efficiency
+ Competent and abundant workforce
+ Loading capacity: 1.5 – 2.5t/m2
+ Ceiling height: 8.7-10m
Micro warehousing is one of the most sustainable choices that is gradually making its way across the whole digital commerce ecosystem, with expanding e-commerce companies and their operation areas, limited resources to manage stocks, and unexpected customer needs.
Savills Industrial Vietnam offers different warehouse options to satisfy our clients’ requirements. With various warehouses across Vietnam, Savills Vietnam is establishing the standard for being a reliable and top industrial real estate service in Vietnam to provide fully functional small warehouse in Vietnam. If you desire to lease a small warehouse with the help of experts, contact Mr. John Campbell for more information now!
For our latest publish of Industrial market update: Industrial Insider Q1 2022