The warehouse management system market was valued at USD 2.4 billion in 2020 and is likely to reach USD 5.1 billion by 2025, at a CAGR of 16.0% from 2020 to 2025. A WMS is a software application that helps manage operations in warehouses in the most efficient and productive manner. Functions of these systems include inventory control, labor management, yard management, and dock management, among others.

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COVID-19 impact on the warehouse management system market

COVID-19 has emerged as a global pandemic that has spread across 215 countries and has disrupted various industries globally. The pandemic is rapidly changing consumer behavior toward online channels. Online demand has increased for multiple categories, including food and beverages, essentials, and pharmaceuticals that are being delivered with innovative contactless formats. This has given an impetus to the growth of e-commerce, 3PL, and FMCG industries. The demand for warehousing has also increased due to the online demand for several products. Several multinational companies are setting up new warehouses across various countries to accommodate this increased demand. This has resulted in an increasing demand for warehouse management systems in e-commerce and 3PL industries. E-commerce giants such as Amazon, Alibaba, and eBay are ramping up the demand for WMS as they continue to set up new warehouses worldwide.

Since the COVID-19 struck the market in early 2020 with consequent lockdown, there has been a standstill in the overall demand activity in industries such as automotive, electronics, and metal & machinery. The WMS market is expected to have a short-term reduction in demand for WMS implementations and upgrades in 2020 due to lockdown across different countries in the world. However, the lockdown is being relaxed gradually, and industrial operations are being resumed with limited capacity.

The WMS market for services expected to grow at the highest CAGR during the forecast period

The WMS market for services is expected to grow at the highest rate during the forecast period. Need for increased efficiency, constant upgrades to ensure data security, and improved operations of WMS software are the major factors boosting the demand for WMS services. Governments around the world have been encouraging the use of WMS in warehouses to improve the autonomy of processing. The rising use of WMS software is leading to an increasing need for services to ensure its smooth functioning.

The market for on-cloud warehouse management systems expected to grow at a higher CAGR from 2020 to 2025

The growing adoption of cloud services in the manufacturing and logistics industries, along with increased reliability of users on cloud companies, is fueling the adoption of on-cloud WMS software. Benefits, such as faster implementation, lower upfront installation and hardware costs, and faster return on investment, are also some of the major factors driving the growth of the market on-cloud warehouse management systems.

The 3PL industry projected to account for the largest share of the warehouse management system market during the forecast period

The 3PL industry is one of the major industries driving the growth of the WMS market. Factors such as the growing need for efficient order management, increased outsourcing of logistics and transportation operations, and globalization of supply chain networks have fueled the adoption of warehouse management systems in the 3PL industry.

North America projected to lead the WMS market during the forecast period

Factors such as the presence of large companies with global warehousing and distribution operations, sustained growth in the e-commerce industry, and wide networks of third-party logistics (3PL) companies are driving the growth of the WMS market in North America.

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Key Market Players

The warehouse management system players have implemented various types of organic as well as inorganic growth strategies, such as contracts and partnerships, new product launches, acquisitions, and expansions, to strengthen their offerings in the market. Manhattan Associates (US), Blue Yonder (JDA Software) (US), HighJump (Körber) (England), Oracle (US), and SAP (Germany), Infor (US), PSI (Germany), PTC (US), Tecsys (Canada), BluJay Solutions (UK), Epicor Software (US), 3PL Central (US), Cantaloupe Systems (US), Datapel (Australia), Dematic (US), Generix Group (France), Mantis (US), Made4net (US), Microlistics (Australia), Nulogy (Canada), Reply (Italy), Softeon (US), Synergy Logistics (UK), and Vinculum Solutions (India) are the players in the WMS market.