NetFlorist joins Inospace's growing array of last-mile logistics parks

As an online retailer that fulfils around 2,000 orders a day, NetFlorist requires a significant amount of last-mile delivery logistics space. There is a growing demand for this type of space, with smaller format logistics real estate benefitting from a rapidly expanding e-commerce industry.

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"We are excited about NetFlorist coming on board to our site in Parow. They are exactly the type of e-commerce business we want on our platform," said Inospace COO Jacques Weber, who notes that NetFlorist joins a number of other e-commerce businesses that make up roughly 30% of all new Inospace leases, up from below 5% five a year ago.

“Since NetFlorist first launched in 1999, we have grown to become a diverse online gifting platform fulfilling over 80 000 deliveries a month across South Africa. This has led to an urgent demand for effective last-mile logistics space, a need we feel confident in handing over to Inospace to help execute for our Cape Town operations going forward,” says NetFlorist Director, Jonathan Hackner.

While everything from large dedicated facilities to smaller infill facilities are in demand, Inospace has noticed a distinct uptick in demand for logistics space due to a growth in e-commerce since the Covid pandemic.

"E-commerce is becoming an increasingly important demand driver for logistics real estate in South Africa. This has led to faster occupancy and rising market rents for this type of space, in particular for mid-sized and smaller companies, putting them in greater competition with a broader swath of the marketplace for space availability," says Inospace Chief Marketing and Product Officer Jodi Sher.

This shift means logistics operations that serve store distribution and e-fulfilment have become more visible as industry participants leverage their existing supply chain investments. These multi-use scenarios regularly transition toward dedicated e-fulfilment as the requirement grows. And depending on the needs of the business, the space can vary from established businesses requiring mid-sized and large facilities, to newer brands, many with no physical retail presence, only needing a single, small last-mile location. Third-party logistics and parcel delivery companies are also jostling for small fulfilment warehouses in key areas. This is leading to growth in everything from units smaller than 500 square metres up to more than 5,000 square metres.

South Africa’s online retail industry was one of the few winners of the 2020 Covid pandemic, which digital economy commentators believe was a "tipping point" for online retailing's penetration of the retail market. Recent data from FNB Merchant Services shows that South Africa's e-commerce market has grown rapidly and is estimated at just under R200 billion per annum. According to the data, South Africa's e-commerce market will reach more than R400 billion by 2025, on the back of more than 1 billion transactions per annum. Statistics show that total online sales in 2020 jumped by 55% and another 42% in 2021, with transaction volumes estimated at 500 million, up from 200 million in 2019 and 345 million in 2020.

Third-party logistics and parcel delivery companies are also jostling for small fulfilment warehouses in key areas. This has led to growth from units smaller than 500 square metres to more than 5,000 square metres.

“Collaborating with NetFlorist allows us to demonstrate how we are a critical role player in e-commerce fulfilment,” adds Sher.