June 26, 2019

Global WMS market to reach $5 billion

E-commerce explosion will drive 14 percent growth rate in spending, create 57,000 new warehouses globally by 2025, study shows.

By DC Velocity Staff

The global market for Warehouse Management Systems (WMS) will increase at a compound annual growth rate of 14 percent to reach $5 billion by 2025, driven by the growth of e-commerce worldwide, according to a study by technology advisory firm ABI Research, released earlier this month.

The London-based researcher said it expects to see 57,000 more warehouses globally compared to 2018 during the same forecast period. The need to increase speed, flexibility, and efficiency is driving the investment in facilities, automation technology, software, and warehouse management systems, the study authors said.

"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," Nick Finill, principal analyst at ABI Research, said in a statement announcing the results. "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."

Regionally, Asia-Pacific will see the highest growth of warehouse facilities and WMS revenue, becoming the largest market for the software by 2023, according to ABI. The researcher said it expects to see rapid adoption of WMS in the Middle East, Africa, and Latin America, and noted that Europe and North America will experience strong growth due to increased spending on upgraded software systems.

By industry vertical, ABI said logistics represents a mature market for WMS adoption and that the highest WMS spending will come from the retail, food and beverage, and manufacturing sectors as they try to catch up with other industries. 

ABI said it expects to see more artificial intelligence (AI)- and machine learning (ML)-driven innovation by software vendors in the short term as well.

"The increasing velocity of goods through the supply chain is driving demand for real-time decision making and optimization," Finill also said. "As the margin for error in the warehouse decreases, AI and ML-enabled WMS solutions are becoming imperative for warehouses that rely on speed, efficiency, and intelligence to remain competitive."

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