Micro Fulfillment Market

The Global Micro Fulfillment Market is valued at USD 2.88 Billion in 2022 and is projected to reach a value of USD 53.34 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 44.00% over the forecast period.

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Micro Fulfillment centers are the strategic placement of smaller warehouses and distribution facilities within widely densely populated areas. The closer proximity of such facilities to the consumers often enables rapid and cost-effective delivery of products ordered using online channels. The primary driver for the rising micro-fulfillment market can be attributed to the expanding e-commerce industry along with the rising demand for de-stressing traditional and shipping will increase.

Additionally, the unreliability of traditional storage and shipping methods needs to be identified. This is solved by identifying the key regions associated with the wide usage of online channels wherein fulfillment centers are built. These factors will widen the scope of the market's growth.

Increasing demand for sophisticated shipping and storage systems, along with the manipulation of a quick and profitable delivery schedule, will increase the footprint of the global Micro Fulfillment market during the forecast period. Major manufacturers are focusing on saving fuel and consuming lesser fuel, as fulfillment centers are located within key vicinity of important zones. Rising investment by key manufacturers toward identifying such pivotal zones will increase the number of fulfillment centers during the forecast period. Rising disposable income among the wider population is expected to increase, further widening the scope of the e-commerce industry. Consumers required many groceries and other essentials even if forced into lockdowns. Micro Fulfillment centers leveraged their existing position in the market to fill in the gap for this increased demand in deliveries.

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Various end-users, such as manufacturing and general stores, are widening their scope in terms of utilization. Micro Fulfillment centers are also heavily reliable as they ensure on-time deliveries, which is expected to fuel the growth of the global Micro Fulfillment market during the forecast period. The rising integration of technological advancements is expected to create wider opportunities for the global micro-fulfillment market during the forecast period. A higher cost of capital for setting up automated robotic solutions is expected to hamper the growth of the global Micro Fulfillment market during the forecast period. Since automated robotic devices are still in the development phase, with many tests being carried out to check for physical viability, the economic viability of such practices still needs to be discovered.

Top Market Trends

1. Reliance & Speedy Deliveries to Propel Market Growth: Reliance and speedy delivery through e-commerce have become common globally. Additionally, many previously untapped markets are being identified and acclimated to the ease of convenience that Micro Fulfillment centers offer. For instance, the Chinese market is experiencing a consumer revolution, wherein international products are entering due to innovative marketing techniques and improved advertising methods.

2. Rising Utilization in Asia Pacific Region: Increasing brand consciousness will further increase the micro-fulfillment market during the forecast. Many industry leaders are expected to penetrate the Asia market by increasing their presence by installing numerous 1000 MFCs in the region during the forecast period.

3. Increasing Urbanization to Propel Demand: The rising number of warehouses in urban areas is expected to undergo automation. This will make handling the increased volume of goods required to be delivered extremely reliant and time-consuming.

4. Automated Mobile Robots: Automated mobile robots (AMR) are programmed by various algorithms that can understand and move through various locations in real-time. These robots are expected to work in an unsupervised manner with developments over time. Innovative designs and clever software will enable these robots to widen the footprint of the global micro-fulfillment market during the forecast period. Market leaders such as Amazon, Kroger, Albertsons, and Nike began investing in these automated practices during the pandemic.

5. A Budding E-Commerce Sector to Widen Demand: Micro Fulfillment centers rely heavily on a budding e-commerce industry as their main income source. These Micro Fulfillment centers are rapidly increasing due to the integration of grocery stores and chains integrating within their ecosystems. The pandemic forced major grocery and retail chains to adapt to a new distribution channel as the pandemic forced innovation to evolve.

Market Segmentation

The global Micro Fulfillment market can be categorized on the following: End Users, Components, Applications, and Region. Based on End Users, the market can be categorized into Retailers, Manufacturers, and Distributors. Furthermore, based on the Components, the market can be segmented across Control Systems and Material Handling. In addition, based on the Applications, the market can be split between Grocery and Merchandise. Likewise, based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on the End Users

Manufacturers & Distributors Occupy the Largest Market Share, while Retailers are Expected to Expand with the Fastest Growing CAGR

OEMs for mobile phones and other electronics and devices are expected to increase in volume through e-commerce channels. Manufacturers and distributors are expected to choose e-commerce as their primary distribution mode. Direct-to-consumer business is expected to witness a surge in sales due to increasing modes of payments through these channels and rising disposable income among consumers. Key leaders in the market are offering attractive discounts on the products advertised through a wide range of festive offers such as Black Friday sales. These factors will prompt increased segmental growth during the forecast period. The retailer's segment is expected to grow with the fastest-growing CAGR during the forecast period owing to higher visibility among consumers and lowered prices.

Based on Components

Material Handling to Dominate Segment Owing to Rapid Automation

The Material Handling segment is expected to widen its scope in revenue and sales and will occupy the largest market share during the forecast period. Various manufacturers are establishing automated warehouses to speed up deliveries and make them highly effective. A rapid pace is being witnessed toward building the required infrastructure for automation solutions. The rising use of e-commerce and rising demand for sold goods to be delivered is expected to add to the segmental growth of material handling during the forecast period. Control systems are expected to grow with the fastest growing CAGR during the forecast period owing to increasing integration and availability of software for regulating these systems.

Based on Applications

Merchandise to Reign Dominance During Forecast due to Increasing Integration of E-Commerce for Distribution

Merchandise will occupy the largest market share in terms of volume, including mobile phones, clothes, make-up accessories, and other electronics and devices. Rising mobile phone sales and increasing connectivity activities are expected to increase the footprint of e-commerce-based distribution. Additionally, merchandise can be bought through various modes of payment. This gives consumers many choices, automatically widening the merchandise sales footprint. Grocery sales are expected to grow with the fastest growing CAGR during the forecast period owing to the integration of Micro Fulfillment centers with many big-box grocery stores and retail chains.

Based on Region

North America to Witness Largest Market Owing to Existing Infrastructure

The Micro Fulfillment market in North America will occupy the largest market share during the forecast period in terms of revenue and volume of goods delivered. Factors such as increased integration of e-commerce as the primary mode of delivery will contribute to market growth. The United States will occupy a majority of the portion for the market. Studies reveal that online grocery stores will contribute more than 10% of overall grocery sales by 2025 in the U.S. Consumers developed a habit of purchasing most of their purchases online during the pandemic. This habit is expected to continue. Increasing delivery options such as home deliveries, curb-side pickups, locker-based deliveries, and in-store pickups will contribute to the increasing footprint of the micro-fulfillment market in North America.

Asia Pacific is expected to grow with the fastest-growing CAGR due to the rising inclination of e-commerce deliveries. The growing preference for e-commerce among business practices is expected to increase the region's footprint on a global scale. This will prompt an increase in B2B e-commerce adoption in the region, prompting an increase in the micro-fulfillment market.

Competitive Landscape

The competitive pace of the global Micro Fulfillment market is highly competitive, with the presence of many global and regional players present. These players constantly strive to outdo each other by focusing on their research and development investments. Additionally, the introduction of smart technologies, such as AI and ML, to reduce human intervention and automate repetitive processes is expected to surge.

The key players in the global Micro Fulfillment market are Alert Innovation Inc (U.S.), Ahold Delhaize (Netherlands), Bastian Solutions LLC (U.S.), Davinci {{keyword}} (U.S.), Dematic (U.S.), Flowspace (U.S.), Fortna Inc. (U.S.), Honeywell International Inc. (U.S.), HÖRMANN (Germany), Instacart (U.S.), KPI Integrated Solutions (U.S.), LOCAD (Singapore), OPEX (U.S.), PACK and SEND Holdings Pty. Ltd. (U.S.), Pacline Overhead Conveyors (U.S.), Swisslog (Switzerland), The Kroger Company (U.S.), to note a few.

Recent Market Developments

· March 2021: Honeywell International, Inc. announced their latest shipping innovation in the form of the industry's first robotic technology by launching a smart depalletizing robot for Micro Fulfillment. This product is anticipated to increase warehouse and distribution center automation.

· July 2022: Alert Innovation, Inc., a market leader in e-grocery fulfillment automation, announced signing a definitive work agreement to be completely acquired by Walmart. This is expected to positively boost the Micro Fulfillment market impact. Alert Innovation has been working together with Walmart since 2016 on Walmart's market fulfillment centers (MFCs) and began with the pilot of the Alphabot System in Walmart's first MFC in New Hampshire in 2019.

Segmentation of the Global Micro Fulfillment Market