Saudi Arabia’s Fast-Growing E-commerce Sector to Benefit from Smart Warehouses

The booming e-commerce industry in Saudi Arabia will push forward further by investing in high-tech warehouses. The Saudi Authority for Industrial Cities and Technology Zones (Modon) has entered a deal to set up 14 advanced warehouses in Jeddah. 
 
It is no surprise that the e-commerce segment in Saudi Arabia is thriving. The country is one of the most preferred locations for venture capitalists (VC). 

In fact, venture capital (VC) total investments in Saudi increased by 72% from 2021-22, reaching $987 million in 2022, of which $119 million went into e-commerce. Interestingly, the country witnessed a steady increase in VC dollar investments every quarter in 2022. 

It even overtook the United Arab Emirates for the first time in the second quarter of 2022 by attracting a higher share of VC investments. 
 
As per TradeArabia, the modern smart warehouses will be wholly digitized and automated. The facilities will employ warehouse robotics to replace large numbers of operators. 

The storage units within the warehouses can be accessed through a smartphone app. The high-end warehouses will also use big data analytics to assess inventory levels, forecast demand, and arrive at optimal routes for transportation. 

These technologies will help reduce operating costs, improve efficiency, and optimize lead time. However, the new venture calls for large amounts of investment money from all players, including Amazon. 
 
Modon's smart warehouses are expected to heighten automation in the retail industry. 

The results are already evident. Right after the news of launching smart warehouses in Jeddah came the announcement of setting up a new fulfillment center by Starlinks, a major logistics and supply chain solutions provider in the MENA region. 

The facility is expected to have a massive area of 400,000 square feet, the capacity to house over 12 million units, and employ nearly 250+ Geek+ robots. 

Salah Taha, the Director of Operations at Starlinks, commented in a press release, "The new solution comprises a pallet storage and handling storage system, a manual pick tower as well as a robotics solution allowing us to cater to a wide range of customer requirements and operations complemented by micro fulfillment centers distributed strategically across Saudi Arabia." 

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