Asia Pacific Automated Material Handling and Storage Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Asia Pacific Automated Material Handling and Storage Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Asia-Pacific Automated Material Handling (AMH) and Storage Systems Market (henceforth, referred to as the market studied) is expected to grow with a CAGR of 12.3%, during the period 2022-2027. With the rapid growth in stock-keeping units (SKUs), wholesalers and distributors are finding it difficult to make informed decisions about operations. This factor is driving the overall need for smarter usage of labor, equipment, and technology. The major factors driving the need for automated material-handling systems are cost savings, labor efficiency, and space constraints.

Key Highlights

• In the current market landscape, there is an increase in available products and demand for more frequent and smaller deliveries. The automated distribution operations can immediately increase an organization's order accuracy, from half a percent to several percentage points. The primary driving forces for the growth of the Asia-Pacific regional segment are the rising urbanization, rising e-commerce sales, and the significant presence of technology providers. These players are investing in research and development activities to offer innovative solutions to stay in the competitive market.
• Asia-Pacific emerged as one of the world's largest e-commerce hubs. The region witnessed a rapid growth in retail e-commerce, owing to the rising middle-class population in China, India, and Indonesia, along with the popularity of mobile gadgets. China alone accounts for 40% of the world's retail e-commerce sales. In some Asia-Pacific countries, the land for warehousing is becoming increasingly limited. In these areas, the trend of warehouses is expected to go up, with both multi-story facilities and taller, narrower aisles. These trends are expected to drive the demand for material handling systems.
• Over the last 70 years, the overall material handling has undergone various transformations that have changed the industry's outlook. Material handling machines and robots replaced individual workers. Due to this vast transformation, many enterprises have grown, especially the automotive industry, which has experienced a 10-fold growth. Developing countries in Asia, such as India, are investing in material handling equipment significantly. According to the Wisconsin Economic Development Corporation, the Indian market for materials handling equipment (MHE), accounting for about 13% of the market share of the country's construction equipment industry, witnessed significant growth in the recent past.
• The markets in the Southeast Asian countries are also witnessing an increasing number of manufacturing businesses establishing new facilities in Thailand, the Philippines, and Vietnam. This also increased the employment opportunities within the region, thereby boosting the average disposable income, which, in turn, is helping to drive the demand for local warehouses, as people are aware of the international brands. Indonesia is also categorized as a nation adopting automation rapidly. The country recorded an increased robotic usage for industrial work. Moreover, since Japan is both its supplier and consumer, Indonesia is expected to benefit from the trade with Japan, boosting the demand for automation in the region.
• The COVID-19 outbreak and lockdown restrictions across the globe have affected industrial activities across the world. Some of the effects of lockdown include supply chain disruptions, lack of availability of raw materials used in the manufacturing process, labor shortages, fluctuating prices that could cause the production of the final product to inflate and go beyond budget, shipping problems etc.

Key Market TrendsAssembly Line to Witness Significant Growth

• The principal application of assembly-line AGVs is primarily found in the automobile and other coach-building industries, such as aerospace and railways. Moreover, with the increasing production of electric and hybrid variants, the demand for assembly line AGVs is expected to increase over the forecasted period. As this trend continues to advance, the manufacturers, especially in the automotive and aerospace industries, will be able to achieve unprecedented flexibility that will allow them to quickly respond to the changes in the market while maintaining safe and cost-effective operations.
• The advent of electric and hybrid vehicles revolutionized automobile manufacturing in the past decade. Automobile production has become far more sophisticated and complex. The ever-evolving government safety regulations and industry standards further complicate the assembly line tasks. It has created a significant demand for automation in the automotive sector. Minimizing products' damage during transit (caused by human error) and increasing the speed of handling the chassis between workstations (which would allow interaction with assembly-line workers) are the utmost priorities. Since, the assembly line AGVs perfectly fit all these requirements, it became the prime reason for the rapid adoption of these vehicles in the automotive sector.
• In addition, businesses employ automated assembly lines for automobiles to create parts, including engines, gearboxes, fuel systems, and pumps. Robotics and vision are best suited for creating ergonomic and efficient product lines that protect the human workforce from hazardous conditions while completing assembly quickly. As a result, automation is being driven throughout the entire automotive sector by safety concerns.
• An industry report by ASDC (Automotive Skill Development Council) 'Human Resource and Skills Requirements in the Automotive Sector (2026)' predicted that 45.08 million individuals in India would work in the automobile industry by 2026. The current automotive workforce must be retrained and improved to satisfy future demand and be prepared for the future. New skills in automotive design, robotics, IoT, AI, mechatronics, 3D printing, machine learning, virtual collaboration, analytics, and computational thinking are needed as old roles disappear. It has also raised the demand for automation in India's automobile industry.
• To meet demand, a wide range of market players are expanding their manufacturing capacities and launching new product lines. For instance, in 2021, the Indian mobility solution provider Ola planned to utilize ABB's automation solutions in its factory's major manufacturing process lines, including its welding and painting lines.

Industry 4.0 Investments are Driving the Demand for Automation and Material Handling

• Every country realizes the overall significance of airport investments since people are more willing to spend time and money in a relaxing environment. In both large and small airports, conveyors and sortation systems successfully reduce the number of annoyances from check-in through onboarding. Customers get benefit from this and enjoy a hassle-free experience because of this. Most airports are partnering with vendors to implement autonomous robots, increasing the efficiency of transferring luggage and reducing the overall operation cost. For instance, logistics automation specialist Vanderlande Dutch has partnered to trial autonomous baggage handling vehicles at Hong Kong Airport.
• Due to the growing domestic air connectivity and per capita GDP, India and China are significant regional contributors to the development of the aviation industry. For instance, the ICAO reports that the Asia Pacific accounted for 70% of domestic travel.
• The Chinese aviation market is expected to witness significant growth over the next few years. Its three largest airlines, such as Air China, China Southern, and China Eastern, have ambitious fleet plans to put their sizes at the top of airlines globally. China's major airports in Shanghai and Beijing are also undergoing major expansion plans.
• The Chinese Tourism Outbound Research Institute estimated that by the end of 2030, there would be about 400 million outbound visits conducted by Chinese tourists, likely making up a quarter of all visitors traveling abroad. Airports need sophisticated systems to guarantee adequate support for such expansion. Throughout the forecasted period, this is anticipated to affect market growth favorably.
• On the other hand, due to the ongoing pandemic, many airports have implemented robots to diagnose passengers and prevent the spread of the virus. For instance, the Smart Airport team at Incheon Airport of South Korea is working to improve the airport experience for people with reduced mobility (PRMs), using robotics technology and automated vehicles.

Competitive Landscape

The Asia Pacific Automated Material Handling and Storage Systems Market is highly competitive, which is mainly driven by the strong presence of the large number of players involved in the market. High barriers to exit, growing levels of firm concentration, and market penetration are some of the major characteristics influencing the competition in the market.

• February 2022 - Wise Robotics, the flexible warehouse automation solutions supplier, announced an extension of its range of autonomous warehouse robots – launching VisionNav’s vision-guided, counterbalanced VNP15 automated forklift into its growing portfolio. The innovative VNP15 uses vision-based intelligence to automate material handling, storage, and retrieval. Its technology enables it to learn and navigate existing infrastructure, making it far more adaptable and easier to deploy with minimal site modifications.
• January 2022 - Wise Robotics, the supplier of flexible warehouse automation solutions, partnered with the world leader in vision-guided autonomous robotic forklifts, VisionNav, to bring greater innovation to UK warehouses. This will help UK operators boost order fulfillment and reduce the ongoing costs associated with running a warehouse in the face of well-documented supply chain challenges.

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