Russian WMS market

2023: Warehouse Management Systems Market in Russia in 2022 and 2023 - TAdviser Review

In 2023, the Russian warehouse management systems (WMS) market continues to undergo noticeable changes, reflecting important economic and technological trends. The concept of import substitution becomes an integral part of companies' strategies, which affects the choice of solutions in the field of WMS. With the departure of foreign vendors, the opportunity opens up for the development of domestic software , which, in turn, contributes to increasing the competitiveness of the Russian market. Having gone through a difficult 2022, enterprises continue to study and analyze the past and upcoming changes in the market.

WMS System Market Growth in 2022 by 25%

Speaking about the development of the market last year, experts interviewed by TAdviser mention import substitution as the main reason for the changes and growth.

In 2022, several key factors influenced the development of the market. One of the main drivers of growth was, of course, import substitution, but mergers and acquisitions (M&A) transactions also had a significant impact. These strategic steps allowed companies to strengthen their position in the market, combine resources and expertise. In addition, the rise in the cost of labor in warehouses was also an important factor associated, in particular, with a decrease in the number of migrants who previously made up a significant share of the labor force in the logistics sector. The decrease in this category of workers has led to increased competition in the labor market and, as a result, to an increase in the cost of labor, "says Anna Korchminskaya, Deputy General Director, Director of the Logistics Department of KORUS Consulting Group of Companies.

According to TAdviser, the Warehouse Management System (Warehouse Management System) market in WMS 2022 increased by 25% and reached 3.1 billion. rubles The opinions of experts surveyed by TAdviser were divided, but in general they are inclined to believe that in monetary terms the volume of this market may be about 3-4 billion rubles with dynamics from 20 to 40%.

The two most significant events of 2022 in the WMS market are, firstly, the departure of most foreign vendors, the second is a massive transition to Russian solutions, which significantly increased the market capacity for Russian companies and provided them with serious development potential for many years, - added Dmitry Blinov, founder and managing director of LogistiX Group of Companies.

Despite the fact that 2022 became a difficult year for the WMS market, it was able to adapt and maintain quality at the same level. Not the last role in this was played by the actions of the Government and the Ministry of Digital Development: according to Artem Dolgikh, Director of Business Development at AXELOT, it was their consistent support for the entire IT industry that had the key impact on the results, when IT companies were given the opportunity to continue doing what they best know how to do.

Largest WMS Providers

Revenue of participants in the Russian market of WMS systems in 2021-2022 *

№	Company	Status	Total revenue from the implementation of WMS projects for 2022, million rubles. Including VAT	Total revenue from the implementation of WMS projects for 2021, million rubles. Including VAT	Dynamics 2022/2021,%	Key WMS solution that the company is implementing	Number of employees engaged in the development, implementation and support of WMS systems as of 2023	The largest WMS projects in Russia
1	Accelerot-L	Vendor, Integrator	658	[[Axelot WMS X5	26.8	AXELOT]] WMS X5, AXELOT WMS E5, AXELOT WOS X5	250	HYPERGLOBUS, MOSENERGO, Technonikol, Agroproduction, AZ URAL
2	Novardis Consulting	Integrator	539	147	266.7	SAP EWM	Sberlogistika LLC, NMZHK JSC, SUEK JSC, Hyperglobus LLC
3	KORUS Consulting	integrator	493	490	0.6	n/a	100	Vostokcement, Galamart, Ormatek, ECO Culture
4	LogistiX	vendor, integrator	287.9	[[LogistiX LEAD WMS	23.5	LEAD]] WMS, LEAD WCS	102	Fix Price, Baltika Brewing Company, EFKO Group of Companies, Kerher in Russia, Zdravservice
5	EME	vendor, integrator	231	228	1.3	EME.WMS	70	DV NEVADA LLC, RUSVINIL LLC, ST. SOURCE PLANT LLC, ID LOGISTICS RUS LLC, Meffert Production (Meffert), Abrau-Durso, April (pharmacy chain)
6	TopLog1	Vendor, Integrator	131.8	92.9	41.9 [[TopLog WMS	TopLog]] WMS	Business Lines, Russian Post, Rusagro, Technolight, Soyuzsnab, Optician, Discover Invest
7	SITEK Logistics	integrator	128.4	53.6	139.8 1C:WMS		80	Vostok Service, Komos Milkom, 100 furnaces, X-COM, Zhivika pharmacy chain (Compaspharm URAL)
8	SPC	Vendor	126	122	3.3	Visary WMS	n/a
9	Ant Technologies2	Integrator	84.2	[[WMS Logistics Vision Suite	-26.2	WMS Logistics Vision]] Suite	n/a
10	BIA Technologies	Integrator	N/A	N/A	N/A	N/A	Business Lines
11	Yarus WMS2	vendor	26.6	20.6	29.3	Yarus WMS	n/a	n/a
12	SoftBalance	Integrator	18	12	50.0	1C: Enterprise 8.WMS Logistics. Warehouse Management	5	Teplo3000 LLC, Fort Trading House
13	GTLogistics	vendor, integrator	15.3	6.9	122.2	GTStock	20	NAG, Stella, Dobroga, Ideal Garden, Uvelka
14	ALPE Consulting	Integrator	11	4	149.5	SAP EWM/WMS/ 1C:WMS Logistics. Warehouse Management	Utkonos, Continental, Pharmstandant - Russia, Imzo, Grandpharm - Uzbekistan
	Sum		2779

TAdviser 2022

^{* - Data collected based on company questionnaires unless otherwise specified
1 - Data for 2022 - based on open financial statements. Excluding VAT
2 - Revenues from open accounting for 2021-2022. Excluding VAT}

WMS Market Situation in 2023

2022 trends remain on the market in 2023. The number of requests to change foreign WMS not only did not decrease, but also continues to grow. GTLogistics expert, CEO of the company Ivan Denisov, noted that logistics companies assessed the results of last year, and many of those who did not see a significant increase in the volume of the business realized that it was necessary to develop and seriously thought about the implementation of WMS.

We see that in the first and second quarters of 2023, quite a lot of warehouse system implementations were planned, the costs of this were included in the budgets. Geopolitical factors may affect the market, but if there are no significant changes, this year will be good for Russian vendors in terms of further business growth, he added.

According to Vladimir Lykov, Commercial Director of EME, in 2023, two counter trends can be noted in the WMS market.

{{quote 'Firstly, there is a rapid growth in the warehouse logistics market. According to analysts, for the six months of 2023, the volume of lease and sale transactions concluded in the Moscow region reached a record six-month value and amounted to 1,389 thousand square meters. m. The result already exceeds the final value of 2022 by 2.7% and is a record semi-annual indicator of demand in history. The market is growing not only in Russia, but also in the CIS countries. The geopolitical situation dictates expansion into new territories and the restructuring of supply chains. Inevitably, the need for high-quality automation software is growing. Automation has long been a prerequisite for the successful functioning and development of the business.

Secondly, large Russian companies (for example, in the segment of marketplaces and network retail) are becoming the largest independent warehouse operators in the Russian Federation and the CIS. They initially invested in the development of their own WMS systems without turning to partners, and in several years the systems have achieved a high level of flexibility, fault tolerance and performance. Already, they are monetizing their developments by offering WMS services for their sellers.

In 2023, we focus on large and medium-sized business customers and also expect an increase in the volume of projects performed. We note that projects have become larger, more difficult. Customer demands and expectations are growing.}}

Experts also note that the market still has not established a balance of supply and demand. The Russian IT industry is developing extremely actively, and more and more customers are asking for process automation, and the number of requests exceeds the capabilities of all available Russian integrators. This creates fertile ground both for the development of new automation enterprises and for the IT field as a whole.

Most experts agree that the growth of the WMS market in 2023 will remain at the level of 20-30%. In this case, according to TAdviser, by the end of the year, the market volume may reach 3.7-4 billion rubles.

The 2023 market assumes growth, and those companies that have made efforts to form a scalable structure are actively using this period. We invest considerable funds in the methodology, which allowed us to grow on this foundation by more than 50%, - said Dmitry Blinov, Managing Director of LogistiX Group of Companies.

See also:
 

• "Robots Work In, Not Man": Technology Trends in WMS
• "Import substitution is just a path that everyone needs to overcome." Difficulties and prospects of migration to Russian WMS

TAdviser statistics on implemented projects

For 18 years, TAdviser has been collecting information about IT projects in various industries. During this time, a huge amount of data on implementations of various solutions has been collected. With regard to WMS systems, the publication has accumulated a base of about 1970 projects. Based on it, several ratings were prepared in the context of integrators and vendors of WMS systems, as well as the warehouse management solutions themselves.

Among integrators, Axelot remains the undisputed leader in the number of WMS system implementations. TAdviser is aware of 368 projects implemented by this company. The top three also include EME and Solvo.

Axelot is also a leader among vendors. Until 2018, Axelot, together with 1C, was engaged in the development of the product "1C:WMS Logistics. Warehouse Management. " At the end of 2018, this decision was transferred to Sitek. Axelot focused on the development of the next generation product - Axelot WMS X5.

In terms of specific systems, most projects (for the entire TAdviser observation period) were implemented on the basis of the 1C:WMS Logistics product . Warehouse Management. " The top three also include Axelot WMS X5 and EME.WMS solutions.

Most often, WMS systems are implemented in the field of trade, logistics and distribution, and the food industry. The total share of these three industries, according to TAdviser, is over 66% of all projects implemented.

Go to the TAdviser overview home page "Warehouse Management Systems (WMS)" > > >

2022

How the warehouse management systems market is changing and what its future prospects are

2022 for the WMS market passes under the import substitution flag. The departure of foreign players from the Russian market opened a wide field for the activities of Russian vendors. However, as you know, the medal has two sides. And on the second - the problems of companies that have been using foreign WMS systems for a long time. A significant part of the developers of foreign WMS and ERP announced the departure or suspension of activities in the Russian Federation. At the same time, companies that used cloud foreign solutions faced a complete shutdown of activities, and for them the transition to Russian software became a matter of survival.

As for the on-premium decisions of foreign vendors who announced their departure from Russia, the situation here is not entirely unambiguous. Some experts believe that soon consumers of such systems will still have to migrate to domestic developments, the other part believes otherwise, explaining this by the fact that industrial foreign systems work stably and do not require serious changes and support.

It is important to note that for those companies that work stably and have an internal center of expertise and/or a reliable partner, everything remained at the proper level, as in KORUS with Manhattan. Many clients who chose Western software many years ago are still working successfully on it now, since the system does not require significant changes or any special support, because these are industrial, stable, high-performance solutions, - notes Anna Korchminskaya, Deputy General Director, Director of the Logistics Department of KORUS Consulting Group of Companies.

Another opinion is shared by Vladimir Lykov, EME's Customer Relations Director. According to him, local developers still support the work of such systems, but the transition to a local product is only a matter of time and funding. The remaining foreign systems in Russia also require an assessment of potential risks, he said.

Ivan Denisov, CEO of GTLogistics, agrees with him. In his opinion, the risks of companies where Western WMS operate are associated with the inability to refine systems for new business needs. At the same time, he adds that there are still many companies on the market that do not use professional WMS solutions at all.

Therefore, it is important not only to replace the Western solution with the domestic one, but also to choose the right system when it comes to implementing "from scratch." Companies considering foreign warehouse systems should be aware of the high risks posed by their implementation, - notes Ivan Denisov.

In this situation, the market will be divided into two camps, according to KORUS Consulting. The first will be companies that have all processes functioning stably and do not have clear needs for changes. Such players will continue to work on existing solutions, taking if possible resources from the market to create internal competence centers. The second group is companies that, in the new conditions, are forced to start the process of migration to Russian solutions. Triggers for major changes can be:

• Shortage of resources serving western software;
• Impossibility of actions with a Western software license (purchase, transfer to another legal entity, etc.);
• Change in the management staff of expats who are accustomed to working with Western software for Russian managers;
• "Disconnection" of international companies with Russian subsidiaries and a strong need for local departments to look for IT solutions;
• Compliance of international companies in the direction of Russian subsidiaries in terms of compliance with internal standards and the availability of vendor support.

Most experts surveyed by TAdviser believe that the market will continue to grow. And it is import substitution that will play one of the key roles here. In addition, do not forget about the new rules for the sale of products, and trends in online sales and digitalization of logistics - all this will have a strong impact.

If you look only at the numbers, then there will be a feeling of "evolution." But the structure of customer demand should change very significantly. Projects will begin in those companies that seem to have decided everything long ago. "Revolutionary" will happen in 2023 - when the budgets, which are agreed in 2022, are earned, - said Artem Dolgikh, director of business development at Axelot-L.

On the other hand, the economic downturn in the country should be taken into account. And this factor can have a rather significant negative effect on the market.

You need to understand that our clients are those for whom the current period is not always only new opportunities. For many, these are difficult times, in which there are few forces and means for any automation. Plus, do not discount the even more intensified competition for qualified employees, - notes Artem Dolgikh.

If it were not for the predicted general economic downturn, we would have predicted market growth at least twice, "adds Dmitry Filatov, Business Development Director at InStock Technologies.

It should also be noted that the survey of market participants was conducted in August 2022. The responses of TAdviser respondents do not take into account those events that occurred in the second half of September. Therefore, the negative effect on the warehouse management systems market may be much more serious. The impossibility of real planning and the lack of a clear understanding of the future can slow down and even freeze some projects.

TAdviser statistics on implemented projects

TAdviser has been collecting data on IT projects in various industries since 2005. During this time, a huge amount of information has been collected on implementations of various classes of systems. In relation to WMS systems, the publication has accumulated a base of over 1900 projects. Based on it, several ratings were prepared in the context of integrators and vendors of WMS systems, as well as the warehouse management solutions themselves.

Axelot is the leader in the number of WMS implementations. TAdviser is aware of 315 projects implemented by this company. The top three also include Solvo and EME.

Axelot is also a leader among vendors. Together with 1C until 2018, Axelot was engaged in the development of the product "1C:WMS Logistics. Warehouse Management. " Further, the company focused on the development of the next generation product - Axelot WMS X5.

In terms of specific systems, most projects (for the entire TAdviser observation period) were implemented on the basis of the 1C:WMS Logistics product . Warehouse Management. " The top five also includes EME.WMS, Solvo.WMS, Axelot WMS X5 and Sevco WMS solutions.

As for the industries, here, against the background of others, three areas are explainably distinguished: trade, logistics and distribution, the food industry. They account for almost 70% of all projects implemented.

2021

Market estimates

In the Russian market of warehouse management systems (Warehouse Management System, WMS) at the end of 2021, positive dynamics are noted. According to TAdviser, it amounted to about 12%, while the total volume of this market reached 2.5 billion rubles.

Experts interviewed by TAdviser note that 2021 was marked by stability and moderate evolutionary growth. After some "failure" in 2020, a year later, market participants recorded the demand postponed due to the pandemic.

The growth rate of Russian online trade during the period of coronavirus restrictions has accelerated significantly. New trends required new accounting and new digital logistics.

In connection with the outbreak of COVID-19, it was possible to observe a complete transformation of business operations and logistics processes by 360 degrees - the processes have become even more dynamic, - notes Salavat Samarov, product manager of Digital Labeling, KomLine: WMS, KomLine Company LLC.

The situation with the pandemic has vividly highlighted the emerging problems in the operation of warehouses with a low degree of automation, adds the Vladimir Lykov company's customer service director. EME

Other growth drivers include the Honest Sign system. The need for digital labeling in industry and distribution has aroused increased interest in WMS systems.

Main players

TAdviser has prepared a rating of the largest suppliers of WMS systems in 2021. It includes vendors and integrators of such solutions. The total revenue of the rating participants amounted to 1.87 billion rubles.

The leaders were Axelot-L (Axelot) and KORUS Consulting. Axelot's revenue from the implementation of WMS projects increased by 4.2% and reached 519.1 million rubles. Revenue growth of KORUS Consulting in the same area amounted to 16.7%, revenue volume - 490 million rubles. The fact that Axelot implements its projects on Russian solutions is interesting here, first of all, it is the company's own line of products - AXELOT WMS. KORUS Consulting is an exclusive partner of one of the world's largest developers of warehouse management systems - Manhattan Associates.

The third line of the rating was taken by LogistiX. It showed an increase of 30%, revenue from WMS projects for 2021 - 233.2 million rubles. More details can be found in the table below.

Revenue of participants in the Russian market of WMS systems in 2020-2021 *

№	Company	Status	Revenue from WMS projects in 2021, million rubles.	Revenue from WMS projects in 2020, million rubles.	Dynamics 2021/2020	Key WMS solution that the company is implementing	Key customers in 2021
1	Axelot	vendor, integrator	519.1	498.1	4.2	Axelot WMS X5	ALROSA (PJSC) AK, Ascona-Vek, Russian Helicopters, HYPERGLOBUS, MOSENERGO
2	KORUS Consulting	Integrator	490	420	16.7	WMS Manhattan	n/a
3	LogistiX	Vendor, Integrator	233.2	179.4	30	LogistiX LEAD WMS	Fix Price, EFCO Group of Companies, Gotek Group of Companies, Khabarovsk Refrigeration Plant, Yamz (Avtodiesel), NIZBEL, EKF, Aleiskzernot Products, S.N.S. FOTAROVOILINOIG.COM.COM, NEW
4	EME	vendor, integrator	228	144	58.3	EME.WMS	Dr. Theiss Naturwaren (Dr. Taiss Naturvarin Rus), Titan Wholesale and Retail Food Enterprise, MMAA Logistics (MMAA Logistics), Astoria Cosmetic, Avangard, Rodnik Production Plant
5	BusinessAutomation	Vendor	122	N/A	N/A	Visary WMS	Fesco, Transproekt, Smena VDC, Artek MDC
6	Ant Technologies1	Integrator	114.1	84.1	35.7	WMS Logistics Vision Suite	n/a
7	TopLog2	vendor, integrator	92.9	61.1	TopLog WMS 51.9		, Russian Post OPTIKOM Group of Companies, Energocomplekt, Rusagro Group of Companies, DL-Logistics Solutions, Brinex Group
8	InStock Technologies	Vendor	47	45	4.4	InStock WMS	Agrotrak, Volzhsky Pipe Plant, Home Market
9	Yarus WMS1	Vendor	20.6	15.1	36.1	Yarus WMS	Smart Family, Chemist, Atex Group
	Sum		1866.9

TAdviser 2022

^{* - Data collected based on company questionnaires unless otherwise specified
1 - Revenues from open accounting for 2020-2021. Excluding VAT
2 - Excluding VAT}

Go to the TAdviser Warehouse Management Systems overview home page > > >

2016

The magazine "Warehouse Complex" claims: the WMS market in Russia in 2016 fell by another 9%, the fall has been observed for the third year in a row. True, this figure is half that of last year, but there is no need to talk about market stabilization yet. However, in 2016 there are also positive trends. Customers began to invest again in the automation of warehouse logistics. Old projects are "defrosting" and many new ones are starting. This is partly due to import substitution processes in the software market. The share of Russian decisions in 2016 amounted to 76%.

2011

According to independent experts, the total volume of the Russian WMS (English Warehouse Management System) market in 2011 amounted to $15 million, more than 35% exceeding the same indicator in 2010 (about $10 million)

2010

Revenues of certain Russian companies from the implementation of WMS (licenses + services) 2009-2010 |iSolutions|Ansoft Company 2009, rubles 2010, rubles Growth 2010 to 2009,% KORUS Consulting 90 000 000 65 000 000 -27,8 |35 000 000(!) 12 124 000 19 142 500 57 (!) For 2009 and 2010 According             to TAdviser, May 2011

2008-2009

In 2008, Andrei Efremov, head (at that time) of the marketing department of the Bukhta group of companies, estimated the capacity of the warehouse management systems market in Russia at $183 million. This figure was calculated based on the following data: in 2008, at least 20% of warehouses already operated under the control of modern systems using bar coding technologies. Taking into account the projects already implemented, the market capacity was $56 million: V = 14 (S - 0.2S), where $14 is the approximate cost of automating one square meter of warehouse in Russia; S is the area of storage facilities of class A and B in the country according to the data for 2007 5 million m2; 0.2 - share of WMS implementations (20%).

In the taxonomy of IDC, told TAdviser in a research company, warehouse management systems belong to the Supply Chain Management segment. The volume of this market in Russia in 2009 amounted to about $70 million, in 2007 and 2008 - about $100 million. The main players, according to IDC: SAP, 1C, Microsoft Dynamics, "Galaxy." Thus, in 2009, the market not only did not exhaust its estimated capacity, but also fell in volume by 30%.

Main players

One of the distinguishing features of the Russian warehouse management systems market is its segmentation. There are several dozen players here, both domestic and foreign, while there are no obvious leaders.

Western systems, which for the most part work in Russia through partners - Manhattan Associates WMOS ("CORUS Consulting"), Infor SCM WM (EXceed WMS), Mantis International (Ant Technologies (ANT Technologies)) and many others - have entrenched mainly the reputation of expensive systems intended for large businesses and specialized players in the logistics and distribution industries.

At the same time, domestic developers such as BUHta, Solvo (Solvo), Folio (Folio), Ansoft, Business Technologies (Global) and others also feel great in the local market, practically without overlapping interests with Western expats. "The competition in the WMS market is high, but there is still room for new players. There is no clear leader yet, in each segment several systems and integrators are fighting for this title at once, "confirmed Ilya Luzhansky, business analyst at Ansoft.

Regarding the maturity of the market, the opinions of the experts surveyed by TAdviser differ. So, according to Evgenia Vykhodtseva, commercial director of ISolutions, if reputation risks are considered on a par with financial risks and the former clearly cause the latter, then such a market has reached high maturity. "In our opinion, the Russian market for WMS systems can be called mature when the circle of large players who can offer companies an integrated approach to the implementation of fully functional WMS systems can be determined," she said.

Igor Sidorenko, commercial director of BUHta, at the same time assesses the state of the Russian market for WMS systems as "quite mature." He also pointed to market segmentation with leaders in each sub-segment and noted that every year domestic developments of warehouse management systems are becoming more and more popular, successfully competing with "promoted" Western brands.

Demand Maintenance Factors

The WMS market in Russia is beginning to develop, gradually recovering from the crisis; companies are defrosting investment projects, including those stopped in 2008-2009 due to insufficient funding.

One of the main potential customers of WMS, of course, remains professional players: logistics providers and distribution companies, as well as warehouse real estate developers. In 2011, the demand for warehouse space grew, according to the management company Fragra.

At the same time, demand growth took place at an even greater pace than the increase in warehouse supply, as a result of which the imbalance between these two values ​ ​ became more noticeable. Today, class A (a priori assuming the presence of WMS) occupies 70% of the entire offer.

According to Fragra, in just the first quarter of this year, 23 thousand square meters. m of warehouse space (of which 20 thousand square meters. m accounted for the share of the warehouse complex "Salaryevo" (developer New Logistic Systems). The market growth amounted to about 5%, and the total volume - 6, 2 million square meters.

The volume of new construction of quality warehouses in the 1st quarter of 2011 exceeded the value for the same period in 2010 by 29%. A number of projects could not be put into operation in 2010 as stated, their opening was postponed to 2011 (among large projects - the Aparinki warehouse complex, the Krekshino technopark and others).

By the end of 2011, several more facilities with a total area of about 400 thousand square meters are expected to be put into operation. Thus, by the end of 2011, about 430 thousand square meters can be built. M of high-quality warehouse space, which is 25% more than last year and almost 2 times less compared to the pre-crisis values ​ ​ of 2008-2009.

Now a segment of 4PL operators is also emerging, which are able to predict the needs of their customers, help determine what exactly needs to be ordered, work together with the retailer. This is a very promising direction, because it involves managing the entire supply chain - from the manufacturer to the final buyer.

Another demand factor is the ripening of trading companies to high-quality warehouse automation. According to Vladimir Novikov, technical director of FIT, more recently, warehouses with full-fledged high-quality logistics were completely absent.

But with the growing size of wholesale and retail companies, their coverage of more and more territories, the need for such warehouses began to manifest itself in an increasingly explicit form. "Previously, as an exception, there were retailers who understood the meaning of warehouses, built them correctly and used modern information systems to manage them. As a rule, these were discount networks. Now the situation has changed and an increasing number of companies are thinking about the use of properly built warehouse logistics, "the expert said.

Prospects

Evgenia Vykhodtseva says that the crisis provoked an increase in sales of low-cost accounting warehouse programs, but at the moment trends are changing. Among the companies of the upper segment of medium and large businesses, powerful fully functional WMS, both domestic and Western suppliers, have become in demand. And this promises income growth for integrators.

"We assess the WMS systems market positively. After the crisis stagnation, there is a noticeable revival - the number of projects is increasing. Judging by the dynamics of our company, the number of implementations has increased 1.5 times, "she said.

Similar forecasts are given by Alexander Edelmann, Director of Logistics at PSI Logistics (PSI). According to him, the main trend will be an increase in demand for middle and hi-end solutions, an increase in the number of projects using conveyor and automatic equipment.

Archive: Market 2007-2008

Until 2007, the warehouse management systems market in Russia developed at a very fast, almost explosive pace: 50-70% annually. This growth was associated with the rapid development of warehouses in Russia and a high degree of dissatisfaction with the demand for warehouses from commercial organizations. The demand for high-quality warehouses for a long time is several times higher than supply, despite the increasing pace of construction of new facilities and restructuring of old ones. The development of the market is also associated with a high demand for responsible storage services and an increase in competition in this market. Even distributors, which have large storage areas due to the specifics of their main business, are increasingly acting as logistics operators. As a result, the demand for warehouse management systems increases significantly.

At the same time, 2008 was a turning point for the WMS market. The growth in the number of implementations slowed down, and in monetary terms the market even contracted. According to a study by the marketing agency WMS Explorer, called the Russian WMS Market, there was no final distribution of market shares, and competition on it increased significantly. The difference between adjacent positions in most cases does not exceed 1%, and the average supply cost has decreased.

Due to the financial crisis, the decline continued. Even those companies that have already budgeted 2009 for warehouse automation money, according to WMS Explorer surveys, are increasingly delaying the implementation of WMS "until better times." As of spring 2009, the Russian WMS market was no more than 6.5 million USD. For comparison, in 2008 this figure was 7.6 million. That is, the fall turned out to be equal to 16%.

Several key trends are pronounced in the market:

• the first wave of the sales cycle has ended, finding a customer is now more difficult than a year ago.
• detection of non-conformities and errors of the first stage. Mistakes are characteristic of a young, emerging market. The customer market has become more demanding, WMS suppliers often have to concentrate on supporting projects that have already been completed to the detriment of new sales.
• Reducing the average cost of implementation under the influence of increasing competition, which is not always justified and can lead to a decrease in the quality of the project as a whole.

As a result, there is frequent dissatisfaction with implementations among customers, as well as the search for alternative options. Studies show that often the system is replaced by the customer a year after the start of operation, which negatively affects both the customer's business and the image of the supplier company.

The most important criteria for choosing a warehouse management system from the point of view of potential customers

Criterion	Degree of significance (percentage of total number of respondents)
Cost of solution	25%
Solution Sales History in Russia	31%
Solution Sales History Abroad	3%
Breadth of functionality	58%
Adaptability	42%
Compliance of the solution with the conditions and business processes	81%
Ease of personnel training	60%

A total of 48 companies potentially interested in warehouse automation were interviewed. Survey participants could choose up to three criteria as the most significant, so the total is more than 100%. The results of the obtained numbers were rounded to the whole. Source: WMS-Explorer, 2008

Read also

• Warehouse Management Systems. TAdviser Overview
• Import substitution of WMS systems: difficulties and prospects
• Technological trends of WMS systems
• Global WMS Systems Market
• Available WMS Definition
• WMS Core Capabilities
• WMS Selection and Implementation Steps
• How to train personnel to work with the WMS system
• Benefits of Implementing a WMS System in a Product Warehouse
• How to convince the company's management of the need for a WMS system?