Saudi Arabia Warehousing Industry Booms: $13.2 Billion Growth by 2030 Fueled by E-commerce & Diversification: Ken Research
GURUGRAM, India, Feb. 14, 2024 /PRNewswire/ -- The Saudi Arabian warehousing industry is poised for a surge, fueled by e-commerce growth, government initiatives, and a rapidly diversifying economy. Ken Research's "Saudi Arabia Warehousing Market Outlook to 2030" report predicts a robust 4.5% CAGR, translating to a significant $13.2 billion market size by 2030. This press release unlocks the key drivers, challenges, and exciting prospects shaping this dynamic sector.
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Market Overview: Storing Growth, Enabling Prosperity
Beyond simply storing goods, Saudi Arabia's warehousing industry plays a crucial role in supporting economic diversification, facilitating regional trade, and powering e-commerce expansion. In 2022, the market reached a size of $9.3 billion, and it's on track for remarkable growth, driven by:
-- E-commerce Boom: With internet penetration and online shopping soaring,
efficient warehousing and last-mile delivery solutions are becoming
essential.
-- Government Vision 2030: This ambitious plan prioritizes logistics and
infrastructure development, creating a supportive ecosystem for the
warehousing sector.
-- Economic Diversification: As the Kingdom moves away from oil dependence,
new industries are emerging, requiring diverse warehousing solutions.
-- Strategic Location: Saudi Arabia's position at the crossroads of Asia,
Europe, and Africa makes it a prime hub for regional trade and
warehousing operations.
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Market Segmentation: Diverse Needs, Tailored Solutions
The report delves into the various segments of the Saudi Arabian warehousing market, offering a comprehensive view:
-- Warehouse Type: Public warehouses dominate (60%), followed by dedicated
storage facilities (25%) and private warehouses (15%).
-- Location: Major cities like Jeddah, Riyadh, and Dammam hold the largest
share (70%), with growing demand in emerging industrial zones.
-- Industry Served: Retail & e-commerce leads the demand (40%), followed by
manufacturing (25%) and food & beverage (15%). Healthcare and
pharmaceuticals are emerging segments.
Competitive Landscape: Local & Global Players Collaborate
The market features a mix of established local players, international giants, and innovative startups:
-- Local Leaders: Mosanada Logistics, Panda Retail Company, and Tamer
Logistics hold significant market share with extensive networks and
expertise.
-- Global Giants: DP World, DHL, and FedEx are increasingly present,
offering global reach and advanced technologies.
-- Emerging Challengers: Local startups are leveraging technology to
disrupt traditional models, offering specialized services like
temperature-controlled storage and e-commerce fulfillment.
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Challenges: Building on a Strong Foundation
Despite the promising outlook, some challenges need to be addressed:
-- Limited Skilled Workforce: Finding and retaining qualified personnel in
warehousing operations and management remains a challenge.
-- Infrastructure Gaps: While significant investments are underway, some
regions lack efficient transportation links and modern warehousing
facilities.
-- Regulatory Hurdles: Complex regulations and bureaucratic processes can
hinder the development and expansion of warehousing operations.
-- Technological Adoption: While some players embrace automation and
digital solutions, wider adoption is needed for enhanced efficiency and
transparency.
Future Outlook: A Brighter Horizon Fueled by Innovation & Sustainability
The Saudi Arabian warehousing market is poised for continued growth, driven by several exciting factors:
-- Technological Advancements: Adoption of AI, automation, and blockchain
will enhance operational efficiency, optimize space utilization, and
improve inventory management.
-- Focus on Sustainability: Green warehousing initiatives like
energy-efficient buildings and sustainable packaging will gain traction,
attracting environmentally conscious clients.
-- Public-Private Partnerships: Collaborations between government and
private sector players will accelerate infrastructure development and
promote innovation.
-- Focus on Human Capital Development: Investments in training and
education programs will address the skilled workforce shortage and
enhance industry competitiveness.
Key Takeaways for Stakeholders:
This report offers valuable insights for various stakeholders in the Saudi Arabian warehousing industry, including:
-- Warehousing Companies: Identifying high-growth segments, adopting
innovative technologies, offering value-added services, and prioritizing
sustainability practices.
-- Investors: Understanding market trends, assessing investment
opportunities in promising segments like e-commerce fulfillment and
temperature-controlled storage.
-- Policymakers: Formulating policies that address infrastructure gaps,
promote skilled workforce development, and create a regulatory
environment that fosters innovation and competition.
-- Businesses & Consumers: Gaining insights into the diverse range of
warehousing solutions available, choosing the right providers based on
their needs, and benefiting from improved efficiency and availability of
goods.
Conclusion:
The Saudi Arabian warehousing industry is on an upward trajectory, playing a vital role in the Kingdom's economic diversification and regional trade ambitions.
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Taxonomy
KSA Warehousing Market Segmentation
By Ownership
Owned
3PL
By City
Riyadh
Jeddah
Others including Damam and more
By End Users
Consumer Retail
Food and Beverages
Healthcare
Automotive
Others
By Business Model
Industrial/Retail Warehouses
CFS/ICD Warehouses
Cold Storage
Agriculture and Other Warehouses
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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.
According to Ken Research estimates, the Market Size of KSA Warehousing has shown an increasing trend from 2017 to 2022. KSA's strategic location as a gateway between Europe, Asia, and Africa makes it an attractive hub for trade. The country has been actively promoting foreign trade and industrialization, attracting international companies to set up manufacturing facilities and distribution centers. This leads to an increased demand for warehousing services to support import, export, and local supply chains.
According to Ken Research estimates, the Global Logistics and Warehousing Market - is largely driven by the flourishing e-commerce industry, increasing demand for express delivery, good data quality and extensive automation and the initiatives taken by the government.
The growth of local companies within the logistics sector points to widening industry potential in the country with total warehousing space growing at a double digit CAGR (2021-2026F). Strong leasing momentum is likely to continue throughout the year; 3PL and e-commerce players are expected to drive demand for logistics space.
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Ankur Gupta, Director Strategy and Growth
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