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.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Country Covered||The UAE, Saudi Arabia, Oman, Kuwait, Bahrain, Qatar|
|Key Companies Profiled||Honeywell International Inc., SSI Schaefer, Omron Corporation, Schneider Electric, ABB Ltd, Toshiba Corporation, ALS Logistic Solutions DMCC, Falcon Autotech, Diafuku, Swisslog, Other|
|Market Value (2022)||USD 14.46 Billion|
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:
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:
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:
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:
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 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:
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:
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:
Gain a Competitive Edge with Our GCC Warehouse Automation Market Report
Frequently Asked Questions
A. The GCC Warehouse Automation Market would showcase a compound annual growth rate (CAGR) of around 19.2% during 2023-28.
A. An upsurge in the e-commerce sector would enhance the demand for warehouse automation solutions, thus aiding in driving the market growth during 2023-28.
A. Honeywell International Inc., SSI Schaefer, Omron Corporation, Schneider Electric, ABB Ltd, Toshiba Corporation, ALS Logistic Solutions DMCC, Falcon Autotech, Diafuku, Swisslog, etc., are top players in the GCC Warehouse Automation Market.
A. The construction & building materials is the leading application in the GCC Warehouse Automation Market that is poised to seize a remarkable share in the coming years.
A. Saudi Arabia would present growth prospects in the GCC Warehouse Automation Market during 2023-28
A. The integration of autonomous mobile robots (AMRs) into e-commerce fulfillment centers is a key trend shaping the growth of the GCC Warehouse Automation Market.
A. The plans to expand the logistics sector in countries such as the UAE, Saudi Arabia, etc., to create new opportunistic arena for the GCC Warehouse Automation Market through 2028.
A. The resistance to change due to low industrial automation maturity in certain countries is one of the possible challenge that would limit the GCC Warehouse Automation Market growth.
A. Manufacturers, distributors, retailers, etc., are the GCC Warehouse Automation Industry’s potential end-users, playing a major role in shaping the market in the future years.
GCC Warehouse Automation Market Research Report (2023-2028) - Table of Contents