KSA Warehousing Automation Market Outlook to 2027

Market Overview:

A consolidated market with immense growth potential KSA’s warehousing automation market is being driven by expansion in KSA’s e-commerce industry and government institutions setting up industrial base in the country. Moreover, Rapid digitalization, growing adoption of technology and integration of advanced technologies have led to the growth of the industry. The country has 99.0% internet penetration in 2023.

Major government initiatives, such as Vision 2030, National Industrial Development & Logistics Program (NIDLP), etc. have cemented the growth of automated warehouses in the country. Moreover, significant Marine Network of Saudi Arabia Coupled with Surging Regional Ecommerce Market Have Necessitated the Requirement for Warehouses & Storage Facilities.

KSA Warehousing Automation Market Analysis

• COVID-19 and sudden rise in e-commerce business are the major catalysts for KSA’s warehouse automation to bring efficiency in operation.
• Lack of skilled professionals, improper implementation leading to inaccurate data commands, reluctance to adopt automation, among others have been the key challenges for warehouse automation players.
• The market is majorly consolidated with few players in the Ecosystem currently; huge capital requirement has restricted new entrants into the market.
• The KSA Government is aiming to establish the Kingdom as a logistics Hub under its Vision 2030 by development of SEZ’s, Integrated Transport Infrastructure and Reformation of Sea Ports.

Key Trends by Market Segment:

By Type of Product:  Automated systems such as conveyor and sortation system are grown significantly in the future. Robots such as AMR are very expensive, and is expected to grow at a slower pace. But implementations of robots will gradually increase in the future. But in the meantime, the use of robots is less prevalent in KSA and very few companies are using robots on a wide scale due to lack of knowledge to operate them. Any warehouse with automated systems will definitely possess a WMS, which is an essential part of managing the operations. The growth of WMS will increase significantly in future. It's important to note that AS/RS and automated sortation systems are expensive. So even with less share, it's overall share to the revenue will be relatively higher.

By Captive vs 3PL Warehouse Automation: The Captive segment has been dominating the market for a while. Most of the revenue will be generated through captives in the upcoming years. The demand for captive warehouses is more than 3PL because it is most cost effective and efficient for an organization to have a captive fleet when the volume of order fulfilment is large in a given metropolitan area.

Competitive Landscape:

• Number of SKUs, Brand collaborations and Geographical Presence are some of the key competition parameters in KSA Warehousing Automations Market.
• KSA Warehousing Market is moving towards Real estate Investments with logistic companies promoting Partnerships.
• The market is majorly consolidated with few players in the Ecosystem currently; huge capital requirement has restricted new entrants into the market.
• SSI Schafer has highest market share of 20.0% in the market in 2022. It plans, designs and produces systems for establishing and optimizing warehouses and plants, manual and automatic storage, conveyor, order picking and sorting systems as well as solutions for waste technology and recycling.
• SSI Schafer and ACME hold nearly 30.0% of the total market share in KSA automation warehouse market in 2022.

Recent Developments:

• Agreement between Smart LOG and Four Principles to deepen their presence in Middle Eastern region, particularly KSA & the UAE, for providing warehouse automation to Ecommerce & e-grocery companies.
• Government initiatives, such as Saudi Vision 2030, National Industrial Development and Logistics Program (NIDLP), etc., establishment of new logistic zones, among others is expected to bring massive greenfield investments. In turn, it would catalyze the requirement for multi-client warehouses in the country.
• Saudi Arabia invested $ 800 Mn to expand & modernize the South Container Terminal at Jeddah Islamic Port and double its container capacity to 4 Mn TEUs by 2024.

Future Outlook:

• The market is expected to grow at high pace in the coming 5 years owing to rapid digitalization and surge in investment.
• The demand and market share of e-commerce and retail is expected to increase in the future due to increasing focus towards reducing the overall sales cycle duration.
• Government initiatives, such as Saudi Vision 2030, National Industrial Development and Logistics Program (NIDLP), etc., establishment of new logistic zones, among others is expected to bring massive greenfield investments. In turn, it would catalyze the requirement for multi-client warehouses in the country.
• AS/RS system is expected to increase due to rising consumer spending, heavy investment in R&D activities by companies.
• The market is expected to be driven by ongoing labor shortage, a more integrated warehouse and the introduction of better and more affordable solutions such as automated supply chain module in KSA.