The logistics industry in the MENA region is leapfrogging with regard to automation and smart integrations. As it is the engine to successful e-commerce, a top-notch distribution center is expected to be efficient enough to increase productivity, improve accuracy and boost order lead time. With UAE and Saudi Arabia being on top of the mountain, 70% of the Middle East e-commerce market is centralized in these countries.
MENA Fulfillment Warehouse Automation: Status Quo
In 2020 the warehouse automation market size in the Middle East and Africa reached 700 million US dollars. Minding the continuous changes that have been taking place to optimize inventories, it is expected to attain the value of 1.6 billion US dollars, double what is being achieved nowadays. It is doubtless that product fulfillment warehouses play key factors in reinforcing the supply-chain-based businesses which explain why warehouse cloud computing and stock technology have the highest adoption rate not only in the MENA region but also globally. By 2025 a shift is expected to take place, paving the way for MRO services (maintenance, Repair, and Operations) which will reach the highest share of fulfillment center operations.
Saudi Arabia Leader: Salasa Center
The pandemic has triggered warehousing automation, urging order fulfillment centers, to meet the increasing demand of customers. For instance, only 25% of Saudi Arabia’s warehouses were automated in 2020, suggesting an investment opportunity in the future. It is worth noting, in this context, that Salsa is a leading Saudi-based retail fulfillment center that has boosted the e-commerce industry in the GCC.
“The center reaches 48,000 square meters and is equipped with smart technology to manage the order operations fully through more than 60 stations inside the center that starts with sorting products, checking them professionally, and preparing them for shipment and delivery.”
Security cameras, smart monitoring systems, smoke detectors, and temperature control systems, are the non-negotiables at Salasa center, aiming to provide online sellers with secure and top-notch logistics services.
Top Products Fulfilled in MENA’s Fulfillment Centers:
When tackling MENA’s product fulfillment warehouses, it is important to understand the different e-commerce segments in the region. Electronics, fashion and apparel, cosmetics, and grocery account for 80% out of the whole market, shedding light upon a significant growth compared to other mature e-commerce businesses. In tandem, inventory fulfillment services play a major role in keeping this bar very high. Indeed, the niche of the products mentioned earlier requires special stocking, especially when it comes to perishable goods such as groceries. Fulfillment warehouses have geared up their operations to adapt inventories to the disruptive change that has been taking place since the Covid 19 outbreak.
Amazon Fulfillment Venturing into Revolutionary Center in the UAE:
In a partnership with the Abu Dhabi Investment Office, Amazon is planning on establishing a top-notch fulfillment center that will be ready by 2024. The space accounts for 175,00 square meters and is expected to engulf eco-friendly initiatives starting with a solar rooftop generating renewable energy. As it has already five fulfillment centers spread over the UAE, Saudi Arabia, and Egypt, this Amazon facility will take eCommerce to a whole other level while creating job opportunities and opening new horizons to merchants.
Micro-Fulfillment Centers in MENA:
Micro-Fulfillment Centers: Wave of the Future
The micro-distribution centers’ space is generally less than 100.000 square feet located in areas with higher population density, allowing retailers to pick, pack, and deliver orders in a short amount of time. These shipping fulfillment centers are designed to feed the appetite of consumers and their demand for online grocery shopping. As a matter of fact, grocery e-commerce shopping increased from 62.2 billion US dollars to 95.8 billion during the period between 2019 and 2020. Facing this unexpected rise, many grocery retailers opted for micro fulfillment centers to get closer to their customers. Micro fulfillment centers can be the next big thing in the MENA region as they will allow retailers to move steps closer to their clients, especially if they’re into grocery products.
Final thoughts:
Fulfillment warehouses are constantly being upgraded in an attempt to leverage automation and provide customer-centric opportunities. If you’re importing from China and/or UAE and selling in Saudi Arabia, United Arab Emirates, Egypt, Morocco, then we got the formula you’ve been looking for!
