The warehouse management system market was valued at USD 2.4 billion in 2020 and is likely to reach USD 5.1 billion by 2025, at a CAGR of 16.0% from 2020to 2025. A WMS is a software application that helps manage operations in warehouses in the most efficient and productive manner. Functions of these systems include inventory control, labor management, yard management, and dock management, among others.
The WMS market for services is expected to grow at the highest rate during the forecast period. Need for increased efficiency, constant upgrades to ensure data security, and improved operations of WMS software are the major factors boosting the demand for WMS services. Governments around the world have been encouraging the use of WMS in warehouses to improve the autonomy of processing. The rising use of WMS software is leading to an increasing need for services to ensure its smooth functioning.
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The market for on-cloud WMS is expected to grow at the highest rate during forecast period. The growing adoption of cloud services in the manufacturing and logistics industries, along with increased reliability of users on cloud companies, is fueling the adoption of on-cloud WMS software. Benefits, such as faster implementation, lower upfront installation and hardware costs, and faster return on investment are also some of the major factors driving the growth of the market on-cloud warehouse management systems.
The market for basic (tier 3) warehouse management systems is expected to grow at the highest rate during the forecast period. The growth of basic (tier 3) warehouse management systems is driven by the increasing demand for basic warehouse management system solutions from small and midsized warehouse operators. Further, basic warehouse management system solutions offer higher flexibility and lower subscription cost and can be customized as per the requirements of warehouse operators. Furthermore, the use of tier 3 warehouse management system’s does not require skilled professionals. Use of semi-skilled workforce is sufficient to fulfill all the operations performed by these systems.
The WMS market for the e-commerce industry is expected to grow at the highest rate during the forecast period. Short delivery times, accurate order processing, advanced shipment tracking, and increasing number of online shoppers are some of the key factors boosting the adoption of warehouse management systems in this industry. The enforcement of social distancing, lockdown, and other measures in response to the COVID-19 pandemic has led consumers to engage in online shopping. COVID-19 restrictions are expected to increase the adoption of direct-to-consumer grocery and accelerate demand for warehouse management systems to support these operations. The demand from grocery retail continues to be especially prominent, as numerous warehouse management system suppliers have noted that grocers are investing in warehouse management system for efficient operations.
The WMS market in APAC is expected to grow at the highest rate during the forecast period. The rise in manufacturing and warehousing facilities in this region is facilitated by various initiatives taken by the government to ramp up indigenous production of goods. Also, the introduction of tax relaxations to setup warehouses in the region has improved the warehouse infrastructure in APAC, resulting in attractive market opportunities for warehouse management systems.
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Asia Pacific has suffered significantly due to the COVID-19 pandemic as it has some of the world’s biggest developing economies. China, being the hub of electronics manufacturing, has witnessed heavy losses in this sector due to COVID-19. Production of electronic devices was suspended because of logistics slowdown and the unavailability of workforce. Further, several e-commerce companies around the region have stopped supplying non-essentials. Due to the imposition of lockdowns, a trend of reverse migration is observed across the region.This has resulted in complete closedown of some of the warehouses in the region due to decreased demand and scarce availability of workforce; hence, impacting the WMS market.