by The micro fulfillment market involves the use of automated picking, sorting and packing of items in small footprints closer to end customers to provide faster delivery. Products are stored in upright vertical towers consisting of bins for efficient item localization. Robotic arms are then used to shuttle bins and retrieve products for picking and packing. The process is centrally monitored and controlled to enable accurate order fulfilment within hours. The global micro fulfillment market size was valued at US$ 2.11 billion in 2020 and is estimated to be valued at US$ 4.91 Bn in 2024, growing at a CAGR of 34% during the forecast period of 2024 to 2031.
Key Takeaways
Key Players: Key players operating in the micro fulfillment market are Ahold Delhaize, Alert Innovation, Inc., AutoStore, Bastian Solutions, Dematic, Exotec SAS, Fabric, Inc., Flowspace, Fortna Inc., Honeywell International Inc.,and Instacart. These players are actively investing in automation technologies and adopting collaborative robots or co-bots for quick and consistent order processing capabilities.
Growing Demand: Growing demand for fast delivery of e-commerce orders driven by changing consumer preferences is driving the Micro Fulfillment Market demand. Micro fulfillment meets this demand by enabling delivery within hours through strategically located automated micro-warehouses closer to customers. This convenience along with minimal delivery costs is boosting the adoption of micro fulfillment services globally.
Global Expansion: Leading players are expanding their micro fulfillment network across major markets to tap the fast growing online retail industry. This includes setting up micro-warehouses in high density residential and commercial areas for easy inventory replenishment and last mile fulfilment. New geographical expansion will further accelerate the growth of global micro fulfillment market during the forecast period.
Market Key Trends
Automation is a major trend in the micro fulfillment market. Fully automated micro-warehouses with goods-to-person order picking, dynamic aisle shifting and robotic picking arms are replacing manual order picking to maximize throughput and space utilization. Companies are developing autonomous mobile robots (AMRs) and good-to-person systems for contactless order fulfilment amid COVID-19 pandemic. Growing e-commerce volumes are compelling retailers and third-party logistics players to incorporate flexible micro fulfilment strategies for faster urban delivery at lowest operational cost.
Porter’s Analysis
Threat of new entrants: Setting up micro fulfillment operations require high capital investments in automation and robotics which acts as a deterrent for new players.
Bargaining power of buyers: Large retail chains and e-commerce giants have relatively higher bargaining power compared to small buyers given their market share and order volumes.
Bargaining power of suppliers: Presence of multiple equipment suppliers like Daifuku, KNAPP, Swisslog and others ensures competitive pricing pressure on suppliers.
Threat of new substitutes: Technological innovations in areas like drone deliveries, autonomous vehicles pose potential threats but have limitations in terms of payload capacity and delivery scales currently.
Competitive rivalry:Increased adoption across industries has intensified competition among existing micro fulfillment players, highlighting Micro Fulfillment Market Challenges And Opportunities. This competition is pushing them to enhance automation capabilities and operational efficiencies.
Geographical Regions
North America accounts for the largest share in terms of value currently due to high e-commerce penetration and grocery retail consolidation in the US and Canada.
Fastest Growing Region
Asia Pacific region is forecasted to register the highest CAGR during the forecast period led by China, India, Japan and Southeast Asian countries. The growth is attributed to rising middle-class population, shift towards online shopping and expanding retail & logistics infrastructure in emerging economies.
*Note:
1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya
Ravina Pandya,Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. LinkedIn
