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eCommerce predicted to generate ‘57000 new warehouses by 2025’

20 June 2019

ABI Research says 57,000 more warehouses will be in operation than in 2018. 

In addition, it predicts the global WMS market will be worth US$5 billion, growing at a CAGR of 13.9%, by 2025.

The continued growth of the e-commerce market and rising customer expectations are putting enormous pressure on warehouses to execute more rapid and flexible deliveries. This is driving investment in warehouse facilities, automation technologies, and warehouse management systems to coordinate and optimise operations, explain the firm.

“The warehouse is becoming the engine room of the supply chain and is, therefore, a focal point for investment from retailers, manufacturers, and logistics service providers,” says Nick Finill, principal analyst at ABI Research. “As the warehouse technology ecosystem becomes increasingly complex, supply chain operators require more sophisticated management systems that can orchestrate the high volume and variety of intelligent, connected devices and systems within their facilities, as well as the flow of inventory.”

As the e-commerce boom grows in and extends beyond the established economies of China, Japan, and Korea, the Asia-Pacific will experience the highest growth of warehouse facilities and WMS revenue, becoming the largest market for the software by 2023. The rapid adoption of WMS is also expected in the emerging economies of the Middle East, Africa, and Latin America. Europe and North America will experience strong growth as supply chain operators increase spending on upgraded software systems.

WMS spending will also vary according to industry verticals. The retail, food and beverage, and manufacturing sectors will be responsible for the highest growth rate as they catch up with more mature verticals, such as logistics service providers.

AI-driven Innovation from WMS market leaders such as JDA Software, High Jump, and Manhattan Associates is enabling substantial flexibility and functionality in WMS and Warehouse Execution Systems (WES), an increasingly important orchestration layer linking high-level management with connected machines. At the device and machine level, greater automation is creating demand for more sophisticated Warehouse Control Systems (WCS) from major automated material handling solution providers such as Bastian Solutions, Dematic, and Honeywell Intelligrated.

These findings are from ABI Research’s Intelligent Supply Chain market data report.