Market Trends of GCC Warehousing And Distribution Logistics Industry
Increasing demand for warehousing demand in Kuwait driving the market
- The demand for warehousing in Kuwait is driven by several factors, including the growth of the retail sector, the growing need for cold storage, and the country’s advantageous position as a logistics hub for goods transportation between Asia, Europe, and Africa.
- The warehousing market in Kuwait is expected to expand over the next few years as the economy of the country continues to grow and the logistics industry continues to develop. The growth of e-commerce is one of the main drivers of the warehousing business in Kuwait. As more and more Kuwaiti consumers shop online, the need for warehousing facilities to store and manage their products is growing. This is why specialized e-commerce fulfillment centers are available in the country.
- The warehousing management methods used in Kuwait's industry are anticipated to undergo a significant change. Companies intend to employ biodegradable materials, lessen packaging, and use energy-efficient technology. Agility, a Kuwait-based logistics company, has invested USD 18 million in green supply chain solutions through Agility Ventures, its corporate venture arm. Hyliion and TVP Solar are the two businesses that have benefited from this action.
- The logistics & warehousing market has a number of key challenges and opportunities that affect the functioning of the market. Infrastructure constraints, such as transport networks, ports, and warehousing, can lead to bottlenecks and inefficiencies. Complicated regulatory and customs processes can create obstacles and increase administrative burdens.
- A lack of skilled employees in the industry can affect the quality of service and operational effectiveness. Intensive competition from domestic & foreign players needs to differentiate and innovate. The economy is heavily reliant on the oil & gas sector, making it vulnerable to oil price fluctuations. Geo-political events in the region can disrupt supply chains and increase security risks.
E-commerce growth driving the market
The GCC e-commerce market is expanding with increasing competition, driven primarily by the UAE. Saudi Arabia is expected to remain the largest and fastest-growing e-commerce market in the region, with the consumer electronics and fashion categories witnessing the highest demand. The GCC region has a high spending potential in line with its high per capita income. Additionally, internet penetration and social media penetration are also among the best globally, meaning that the GCC is ready for strong growth in the e-commerce market.
According to industry reports, customers in Saudi Arabia are turning more frequently to their digital devices and are spending more time and money online. About 91% of Saudi customers currently shop online, according to the study. As the opportunity to buy an ever-wider choice of goods and services becomes increasingly fundamental to their everyday life, it is perhaps even more striking that a startling 14% of them say they shop online at least once each day.
E-commerce in Saudi Arabia has exploded as the country works toward Vision 2030, a comprehensive plan aimed at transforming the country into a knowledge-based economy. Online sales have surged by about 60% on an annual basis across all categories, with e-commerce holding the highest position for media products, clothes, and footwear.
