Saudi Arabia Builds Smart Warehouses For Growing eCommerce
A lot of money is going to be spent on new smart warehouses, which will help Saudi Arabia’s online shopping industry.
The Saudi Authority for Industrial Cities and Technology Zones (Modon) has signed a deal to build 14 new high-tech warehouses in the city of Jeddah. These warehouses will be run by a partnership between the public and private sectors.
TradeArabia said earlier this month that the new warehouses will be “fully digital and automated.” This means that businesses will be able to use a smartphone app to get to their storage units.
Modern smart warehouses, pioneered by global eCommerce giants like Amazon, are more automated, and with improvements in warehouse robots, it is normal for entire portions of these warehouses to be empty of humans as warehouse managers seek efficiency through automation.
But building smart warehouses is a big job in and of itself, and companies like Amazon have had to spend a lot of money on warehouse automation, including a big push into the robotics space in Europe.
In the same way, Modon’s most recent project in Saudi Arabia is part of a larger investment push that will lead to more automation in the retail sector.
For example, just days after Modon said it wanted to build 14 new smart warehouses in Jeddah, Starlinks, a Saudi logistics and supply chain solutions company, announced the opening of a new fulfillment center to help eCommerce grow in the kingdom.
In a press release, the company said that over 250 Geek+ robots will be used to pick and sort orders at the new 400,000-square-foot facility, which can store more than 12 million items.
Starlinks is one of the biggest logistics companies in Saudi Arabia and the wider Middle East and North Africa (MENA) region. It works with big eCommerce companies like Amazon to provide warehouse fulfillment and logistics services.
Starlinks’ head of operations, Salah Taha, announced that the new solution incorporates a manual pick tower and a pallet storage and handling system. Robotics allows us to cover a wide range of customer demands and operations with strategically placed microfulfillment centers in Saudi Arabia.
Big data analytics also assist the organization manage inventory, estimate demand, and determine the optimum shipping routes. This helps the company be more efficient, improve lead time, and lower operating costs.
Increasing Logistics Investments
Investments in the country’s logistics infrastructure are happening at a time when eCommerce in the kingdom is booming. Checkout.com said in October that 91% of Saudi customers purchase online and 14% do so daily.
Also, the country became a popular place for venture capital investments in 2022.
Saudi Arabia beat its Gulf Cooperation Council (GCC) neighbor, the UAE, in VC investment in the second quarter of 2022.
Last month, MAGNiTT reported that kingdom financing jumped 72% to $987 million in 2022. Transportation and logistics ($180 million) and eCommerce ($119 million) received the most venture cash after FinTech and food and beverages.
Several startups that are meeting the growing demand for last-mile delivery services got VC money last year. This is because the country’s eCommerce industry is doing well.
Delivery company Mkhdoom and Redbox, which runs parcel lockers in the country, are two examples of this. Last year, they each raised $1.1 million in a seed round and $5 million in a pre-Series A round.
