Automated Storage and Retrieval Systems Market Anticipated to Achieve High CAGR

Posted by Arslan on December 28th, 2018

Top 10 vendors in the automated storage and retrieval systems market account for around 25-28% of the overall market share; yet, the automated storage and retrieval systems market continues to remain fragmented. The fragmentation in the market can be gauged from the fact that Tier III vendors account for nearly 75% market share. These tier III companies are concentrated in a specific state/province and their business model involves providing cost-effective solutions to SMEs. Though these companies do not have the deep pockets to scale up, collectively, they are a force to reckon with.

Recent transformations in the warehousing industry are bringing in state-of-the-art technologies to enhance warehousing functions and management. Automated warehouses are witnessing growing adoption, helping manufacturers meet their demands for obtaining greater throughput. A palpable shift of focus towards mitigating operational issues and enhancing performance of warehousing functions is triggering adoption of automated storage and retrieval systems across a range of sectors.

Leading stakeholders in the automated storage and retrieval systems market are attracting more investments from players in the warehousing industry by aiding them to boost the delivery speed, material handling flexibility, and transportation efficiency with technologically advanced automated storage and retrieval systems.

Automated Storage and Retrieval System Vendors Witnessing Significant Growth in Developing Nations

Rapidly growing manufacturing sector and warehousing industry in emerging economies underscore the inherent growth opportunities for automated storage and retrieval system vendors in developing countries, such as China, India, as well as GCC countries. Increasing growth of the e-commerce and other industrial sectors, such as food & beverage and pharmaceuticals, in developing countries is attracting heavy investments from automated storage and retrieval system vendors. Apart from the manufacturing advantages in developing nations, stakeholders in the automated storage and retrieval systems market are benefiting from growing awareness about the importance of boosting warehousing efficiency with automation in these regions. With a significant rise in investment capabilities of industrial end-users in the emerging economies, stakeholders in the automated storage and retrieval systems market are modifying their business strategies to capture extraordinary growth opportunities in the developing nations.

A majority of industrial end-users are implementing automated storage and retrieval systems that can help them enhance order accuracy, throughput capacity, while reducing warehousing operational costs. Leading market players are putting their efforts into delivering customized solutions to suit industry-specific applications, in order to maintain a competitive edge. Established stakeholders in the automated storage and retrieval systems market are leveraging their expertise in data gathering, design, construction, and technological innovations to deliver highly-customized automated storage and retrieval systems. Furthermore, top vendors in the automated storage and retrieval systems market are adopting next-generation technologies to provide a diverse product selection range in order to meet unique needs of end-users.

Foraying into New Industrial Segments: A Popular Trend Among Automated Storage and Retrieval System Vendors

As the e-commerce sector is undergoing rapid developments, a wide range of industries are adopting warehouse automation technologies to further enhance the efficiency of logistics & supply chain management. Automated storage and retrieval system vendors are shifting their focus on developing new industry-specific solutions to leverage additional profit opportunities by incorporating next-generation automation technologies. Especially in the developed countries, companies with manufacturing or distribution operations are investing heavily in warehouse automation. Thereby, to leverage the rise in adoption of automation solutions, players in the automated storage and retrieval systems market are adopting strategies to enter unexplored industrial sectors rather than aiming to establish a strong position in the existing markets.

High Initial Investments and Operational Costs Impede Widespread Adoption

Though implementing automated storage and retrieval systems can reduce labor costs and improve operational efficiencies, these systems are more expensive than traditional alternatives such as forklifts. High cost of initial investment can mark a huge challenge for small-scale end-users, who do not have access to huge capital, and they may prefer adopting low-cost alternatives to automated storage and retrieval systems. Furthermore, its routine maintenance and occasional repairs may lead to an operational downtime, which may add to the operational costs of automated storage and retrieval systems.