GCC Warehouse Automation Market Research Report: Forecast (2023-2028)

Market Definition

Warehouse Automation encompasses technologies, systems, and solutions prepared to enhance & optimize operations by automating repetitive & labor-intensive tasks. It includes robotics & software systems deployed to streamline processes such as material handling, order fulfillment, inventory management, and logistics within warehouses & distribution centers.

Market Insights & Analysis: GCC Warehouse Automation Market (2023-28):

The GCC Warehouse Automation Market size was valued at around USD 14.46 billion in 2022 & is estimated to grow at a CAGR of about 19.2% during the forecast period, i.e., 2023-28. The GCC countries, such as Saudi Arabia, the UAE, Qatar, etc., initiated economic diversification initiatives to drift away from oil dependency, as a result, manufacturing in verticals like plastics, electrical goods, clothing, food-processing, etc., expanded.

This led to substantial demand for warehousing facilities to support the growing trade volumes & supply chain requirements. To meet the challenges posed by this demand, the adoption of automation surged in warehouses as it optimizes inventory management, enhanced space utilization & increased safety and scalability.

In addition to this, countries in the region, such as the UAE, Saudi Arabia, and Qatar, have plans to boost their manufacturing sector in line with strategic development plans like the UAE Vision 2030, Saudi Arabia Vision 2030, and Qatar National Vision 2030, respectively. For instance:

• In 2022, the Saudi government launched the National Industrial Strategy, which aims to increase the number of factories to about 36,000 by 2035 in the country.

The plans to expand the manufacturing sector involve establishing a large number of factories. As a result, with more manufacturing operations, there would be a higher volume of goods produced, which would need efficient handling, storage, and distribution. Owing to this, many new warehouses would come up in the region, which would require automation solutions to streamline these processes by implementing technologies like automated storage & retrieval systems (AS/RS), robotic picking systems, conveyor systems, and inventory management software. This, in turn, would aid in enhancing the growth rate of the GCC Warehouse Automation Market in the future years.

GCC Warehouse Automation Market Driver:

Upsurge in E-commerce Sector to Enhance the Demand for Warehouse Automation Solutions – The GCC region has a digitally savvy population, with a significant proportion of young residents & high internet penetration rates. Investments in infrastructure to boost e-commerce growth, such as internet connectivity, data centers, and logistics, have led to a remarkable 33% increase in e-commerce sales from 2019 to 2022, higher than the global average of 17%, as per Dubai CommerCity. The rise in e-commerce has led to an increase in warehouses, crucial for fulfilling orders in the supply chain, which, in turn, has driven the demand for warehouse automation solutions as businesses aim to improve operational efficiency in the dynamic e-commerce landscape.

Moreover, the countries in the region, such as Saudi Arabia, the UAE, etc., have actively implemented many initiatives to enhance & solidify their position as a hub for global e-commerce. In 2022, Saudi Arabia’s Ministry of Commerce launched 10 new initiatives to develop e-stores in the country. Through this, the government aims to expand the geographical coverage of delivery services to include delivery to all the regions in the country & not just limited to main cities. This would enhance the number of warehouses in the region, further necessitating the need for automation solutions.

GCC Warehouse Automation Market Opportunity:

Governments Plan to Expand Logistics Sector to Create New Opportunities for the Market Players – The countries in the region, such as Saudi Arabia, the UAE, Oman, etc., wish to position themselves as a global logistics hub connecting three continents, due to which they are rapidly bringing forth new initiatives to support the logistics sector. For instance:

• In 2022, the Saudi Ministry of Transport & Logistics Services (MOTLS) laid strategy to expand the logistics sector market size to USD15.31 billion through 2030. This would be supplemented by Global Supply Chain Resilience Initiative (GSCRI), which was launched by the government in 2022, to attract local & international investments in the supply chain sector.
• In 2021, the Oman government laid out a project titled Tamayyiz, which is a “national indicators initiative” to upgrade the efficiency of the logistics sector. Oman aspires to leverage its deep-water ports on the Gulf of Oman and the Indian Ocean to become one of the world’s top ten logistics hubs by 2040.

Henceforth, the investments in the expansion & upgradation of logistics infrastructure such as logistics parks, industrial zones, and transportation networks would surge, which would result in the establishment of new warehouses & distribution centers. Moreover, with the expansion of logistics infrastructure, there would be a need for advanced technologies & automation systems to optimize warehouse processes, creating new opportunities for the market players to capitalize on the growing market potential

GCC Warehouse Automation Market Challenge:

Resistance to Change Due to Low Industrial Automation Maturity in Certain Countries to Hamper the Market Growth– The resistance to change, arising from the low industrial automation maturity in Oman & Bahrain, has been posing a significant obstacle to the Warehouse Automation Market growth in these countries. Businesses in Bahrain & Oman were less familiar with successful automation implementations & were unaware of the advantages & potential uses of warehouse automation.

Moreover, in Oman and Bahrain, dissimilar infrastructure levels and a high reliance on manual labor have made it challenging for warehouse automation solutions to penetrate the logistics and distribution sector. Moreover, a conservative approach to technological advancements and limited exposure to automation technologies in certain manufacturing subsectors have also hindered the adoption of automation in these countries, posing a challenge to the GCC Warehouse Automation Market.

GCC Warehouse Automation Market Trend:

Integration of Autonomous Mobile Robots (AMRs) into E-Commerce Fulfillment Centers Has Emerged as a New & Promising Trend in the Market – The adoption of Autonomous Mobile Robots (AMRs) in e-commerce fulfillment centers has become a significant trend in recent years. This integration of robotics and automation aims to enhance efficiency, reduce costs, and meet the increasing demands of the e-commerce sector. The Gulf Cooperation Council (GCC) region has witnessed rapid growth in logistics and e-commerce, leading to the incorporation of AMRs into various fulfillment centers to improve throughput, order fulfillment speed, and customer service. For instance:

• In 2023, Geek+, a mobile robotics company for logistics & tar links, a leading logistics & supply chain solutions provider in Saudi Arabia, announced the opening of the first robotic fulfillment center in Saudi Arabia. In this facility, 250 Geek+ robots, covering both goods-to-person picking & order sorting processes, are deployed, covering storage capacity for over 12 million units.

Further, considering the region's substantial increase in e-commerce activities, attributed to factors such as a young population, expanding internet penetration, and evolving consumer preferences, the volume of orders is expected to rise significantly in the coming years. Consequently, the adoption of AMRs by e-commerce fulfillment centers is forecasted to increase further.

GCC Warehouse Automation Market (2023-28): Segmentation Analysis

The GCC Warehouse Automation Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the regional, and national levels. Based on the analysis, the market has been further classified as:

Based on Applications:

• E-commerce
• Food & Beverage Industry
• Automotive
• Pharmaceuticals & Healthcare
• Construction & Building Material
• Others (Electronics, Textiles & Garments, etc.)

Of them all, Construction & Building Materials were one of the dominating segments in the GCC Warehouse Automation Market holding prominent market share. The region's focus on infrastructural development, urbanization, etc., has created a high demand for construction activities & building materials, owing to which the construction & building material industry in the GCC region, has experienced significant growth.

The rise in construction activities has led to a higher demand for storage of construction materials, resulting in the establishment of more warehouses. This has increased the adoption of automation solutions by construction material manufacturers, suppliers, and dealers to streamline warehouse performance.

Additionally, the GCC countries are focusing on becoming a global pharmaceutical manufacturing destination, attracting investments to enhance domestic manufacturing. This will lead to the establishment of new pharmaceutical manufacturing facilities and a surge in the number of warehouses, requiring advanced automation solutions like automated storage and retrieval systems (AS/RS) for improved inventory management and efficiency.

Based on End User:

• Retailers
• Manufacturers
• Distributors & Wholesalers

Retailers in the GCC countries, including Saudi Arabia, the UAE, and Qatar, have embraced warehouse automation solutions to meet the demands of e-commerce and enhance order fulfillment processes. The expansion of the retail sector, driven by companies like Panda Retail Co, Abdullah Al Othaim Markets, Lulu Group International, and Carrefour Saudi Arabia, has fueled the demand for warehouses & increased the adoption of automation solutions for improved performance.

Additionally, government support for digital technologies and e-commerce is expected to lead to more stock-keeping units, driving further demand for warehouse automation among retailers to scale their operations efficiently.

GCC Warehouse Automation Market (2023-28): Regional Projection

Geographically, the GCC Warehouse Automation Market expands across:

• The UAE
• Saudi Arabia
• Oman
• Kuwait
• Bahrain
• Qatar

Saudi Arabia is witnessing the highest demand for warehouse automation solutions, driven by remarkable growth in e-commerce, retail, and manufacturing sectors. With a smartphone penetration rate of 97% and impressive internet speed, the country ranks 10th globally in mobile broadband subscriptions. This digital infrastructure has propelled e-commerce growth, leading to increased investment in warehouse automation by e-commerce companies, thus positively impacting the GCC Warehouse Automation Market. For instance:

• In 2023, the Saudi Authority for Industrial Cities and Technology Zones (Modon) signed a deal to build 14 new high-tech warehouses that would be operated based on a public-private sector partnership model.

The Warehouse Automation Market outlook in the country has been attributed to the government’s efforts to improve supply chain management. Along with this, as part of its strategic initiatives to enhance the port infrastructure development, the country aims to achieve an annual container capacity of over 40 million containers. As a result, the development of port infrastructure & integration with logistics zones surged, which played a pivotal role in driving the market growth in the forecast years.

GCC Warehouse Automation Industry Recent Development:

• 2023: Falcon Autotech (Falcon) announced the inauguration of its new Dubai office in the UAE, representing a significant step forward in the company's expansion efforts within the Middle East market. With this, the company aims to expand its global reach and provide world-class warehouse automation solutions to our customers in the Middle East.
• 2023: Swisslog, a prominent global provider of flexible & data-driven automated solutions, participated in the Seamless Middle East 2023 event & showcased its remarkable AutoStore system through live demonstration. It is an advanced robotic storage & order processing solution known for its high efficiency, and can seamlessly integrate into existing buildings, assisting retailers and e-commerce companies in meeting the increasing demand for swift, accurate, and reliable order fulfillment.

Gain a Competitive Edge with Our GCC Warehouse Automation Market Report

1. GCC Warehouse Automation Market Report by Markntel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. GCC Warehouse Automation Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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