In terms of the competitive landscape, China’s WMS market has many competitors but very little concentration. In other words, there are opportunities for every company.

According to the characteristics of China’s WMS market, “Ecological”, “SaaS” and “Customization” are the three major trends in the future.

China’s WMS market development is divided into four stages, and the competitiveness of China’s local vendors continues to grow rapidly. In terms of revenue, the manufacturing industry creates about 1/5 of the overall market for WMS.

The Current Competition Focuses on the Manufacturing Industry

China’s WMS market development is divided into four stages:

Currently, in terms of market share, the manufacturing industry accounts for about 1/5 of the market, second only to the consumption industry (e-commerce and retail) and is growing at a rate higher than the industry average. However, WMS penetration in the manufacturing industry is low and still has a lot of potential, which is good news for suppliers.

Chinese WMS Products can be Divided into Three Categories

The WMS products in the Chinese market can be categorized into three types:

Currently, traditional WMS products are the most prevalent, with a market share of more than 50 percent, while the third product has a lower market share but the highest potential.

Chinese manufacturing enterprises do not pay much attention to individual warehouse management systems or products. To meet their needs, most suppliers need to provide an integrated solution of “MES+WMS+AGV+Stereo-Warehouse” (depending on the customer’s requirements, MES may be replaced by other digital software).

The unique market demand has led foreign software suppliers, domestic digital software vendors, equipment, and automation vendors, 3PL vendors, AGV vendors, three-dimensional warehouse vendors, and other companies to compete for the WMS market, with very low market concentration.

According to several surveys, less than 1/3 of the companies active in the WMS market focus on WMS as their main product.

In addition, China’s WMS market shows a clear “dual structure”. Overseas suppliers and multinational companies control the high-end market, while the middle and low-end markets are occupied by local Chinese vendors.

Firstly, WMS suppliers need to build their own “ecosystem”. As mentioned earlier, Chinese manufacturing companies do not pay for individual WMS modules or products. Want to win orders from Chinese enterprises, suppliers need to provide integrated digital warehousing or digital supply chain solutions, including software and hardware. Therefore, it is not enough for WMS companies to develop their own strengths, but to establish a good relationship with MES suppliers, three-dimensional warehouse suppliers, WCS suppliers, AGV suppliers, etc., in order to have a competitive advantage.

Secondly, SaaS is a new opportunity for enterprises to realize “overtaking.” On the one hand, “SaaS + WMS” to meet the actual needs of the enterprise data further interconnection. On the other hand, the traditional warehouse management system track has a lot of strong competitors, new enterprises or want more market share of enterprises only to choose a market potential and has not yet appeared “crushing” rivals of the segmentation of the track may be successful.

Finally, WMS products in the Chinese market show a trend towards a higher degree of customization. Compared with other industries, the manufacturing industry has the most complex requirements for warehouse management, and different sub-sectors have their own characteristics. The difficulty does not lie in the technology but in the complexity of business logic. Therefore, manufacturing enterprises have a lot of demand for WMS customization, especially cross-industry customers. On the other hand, for WMS and other digital software, Chinese enterprises are reluctant to accept standardized products, which is closely related to the mixed development of Chinese manufacturing enterprises and business culture.

The post China’s WMS Market Has Significant Potential appeared first on Logistics Viewpoints.