Why Emerging Markets Are Reshaping Global Warehousing Strategy

Emerging markets like the GCC, MENA, and Global South are reshaping global warehousing strategies. Businesses are moving away from traditional offshore models to regional networks that prioritise speed, resilience, and efficiency. Here's why:

• Infrastructure Investments: Countries like the UAE are heavily investing in ports, rail, and logistics networks. For example, DP World committed $2.5 billion in 2025 to expand its global logistics operations.
• Sustainability Goals: Shorter supply chains and energy-efficient facilities are helping companies meet environmental targets.
• Advanced Technology: Robotics, IoT, and AI are driving efficiency, especially in cold chain logistics and automation systems.
• Geographic Advantage: The GCC and MENA regions connect Asia, Europe, and Africa, making them ideal hubs for global trade.
• Cost Savings: Warehousing costs in emerging markets are significantly lower compared to established hubs like London or Sydney.

These factors are positioning emerging markets as key players in the global supply chain, offering businesses lower costs, advanced infrastructure, and access to growing consumer bases.

Forces Driving Warehousing Changes in Emerging Markets

Emerging markets across the GCC and MENA regions are reshaping their warehousing strategies. By focusing on cost efficiency, strategic locations, sustainability, and advanced technology, these markets are building more resilient and agile supply chains.

Geographic Advantages

The GCC and MENA regions benefit greatly from their strategic locations, which have long served as vital logistics hubs. Take Saudi Arabia's King Abdullah Economic City (KAEC), for instance. Positioned as the largest sustainable logistics park in the Middle East, KAEC leverages Saudi Arabia's unique location to connect Europe, Asia, and Africa. Alongside its geographic strengths, KAEC emphasises reducing waste, adopting green technologies, and minimising its carbon footprint.

Similarly, Qatar's Hamad Port Free Zone capitalises on its Gulf location to streamline logistics operations. With smart technology at its core, the zone not only enhances connectivity to global markets but also reduces carbon emissions, aligning with shifting energy and sustainability priorities.

Energy and Sustainability Requirements

The push for sustainable warehousing in these markets is being driven by rising energy costs and stricter environmental regulations. Economic and environmental goals are converging, with 90% of Middle East sovereign wealth funds now embedding sustainability into their strategies. The UAE Energy Strategy 2050, for example, aims to triple renewable energy output to 14GW by 2030, while the entire GCC region is on track to add over 85GW of renewable capacity by the mid-2030s.

This focus on sustainability is transforming logistics parks into eco-friendly hubs. In the UAE, Jafza (Jebel Ali Free Zone) has implemented water conservation initiatives, integrated renewable energy sources, and introduced green transportation options. Similarly, Khalifa Industrial Zone Abu Dhabi (KIZAD) incorporates renewable energy, advanced waste management, and energy-efficient infrastructure to meet stringent environmental standards.

On a larger scale, the region is making significant contributions to global sustainability. Abu Dhabi-based Masdar has spearheaded renewable energy projects in over 40 countries, with a combined capacity exceeding 51GW. These efforts underline the GCC's leadership in driving sustainable practices across supply chain networks.

Infrastructure and Digital Systems

Cutting-edge digital systems are revolutionising warehousing by enabling real-time data processing, predictive analytics, and faster decision-making. Enhanced digital infrastructure empowers businesses to better manage their supply networks, strengthening resilience and operational efficiency.

With global container volumes expected to grow by up to 7%, companies are ramping up investments in digital technologies. Tools like robotics, network digital twins, and real-time analytics are becoming key to improving supply chain visibility and collaboration.

"In 2025, innovations in cloud platforms will continue to transform how infrastructure projects are delivered. Cloud-based technologies like digital twins continue to evolve to offer better quality real-time data integration and AI-powered insights, improving decision-making and sustainability efforts."
– Arun Shankar, Google's Generative AI guru

The Internet of Things (IoT) is also making a big impact, particularly in cold chain logistics. By enabling precise temperature control, IoT is revolutionising the storage and transportation of pharmaceuticals, food, and chemicals. Additionally, companies that localise up to 50% of their supply chain operations report significant improvements in resilience, with 94% experiencing better performance during challenging conditions. These advancements highlight the role of emerging markets in developing the next generation of warehousing solutions.

Infrastructure and Technology: Building Scalable Storage Systems

Emerging markets are reshaping warehousing with efficient, tech-driven storage solutions. The global warehouse automation market is expected to hit US$63 billion by 2030, with automation projected to be in 26% of warehouses by 2027. This shift highlights the growing importance of automation systems and specialised storage technologies.

Warehouse Automation Systems

Robotics and artificial intelligence (AI) are revolutionising warehouse operations across the GCC and MENA regions. Major logistics players have already embraced large-scale robotic systems. By 2024, over 30% of warehouses in emerging markets are expected to integrate robotics, a significant jump from 20% in 2021. These technologies deliver impressive results, such as a 20% return on investment (ROI) within two years, a 30% reduction in picking times, and up to a 50% boost in both service levels and cost-efficiency.

Automated Storage and Retrieval Systems (AS/RS) are particularly useful for managing rapid growth. For example, the Exotec Skypod® system enables warehouses to expand capacity during peak demand without heavy upfront costs. Autonomous Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs) are also gaining traction, with a projected 30% compound annual growth rate (CAGR) through 2028, offering scalable automation without requiring extensive infrastructure changes.

Additionally, Warehouse Execution Systems (WES) are optimising operations by using AI for smarter resource allocation. These systems are becoming indispensable as e-commerce growth drives demand for highly efficient fulfilment centres.

Sector-Specific Storage Facilities

While general automation boosts efficiency, tailored solutions address industry-specific needs. Temperature-controlled storage is increasingly vital in the GCC and MENA regions. The MENA cold chain market is expected to grow to US$41.1 billion by 2030, with cold storage accounting for 56% of activity in 2024. Saudi Arabia is leading this charge, holding 36% of the regional market in 2024 and projected to grow at a 10.6% CAGR to reach US$16.5 billion by 2030. This growth is largely driven by the region’s reliance on food imports, which can reach up to 85% in some GCC countries.

Technological innovations are driving efficiencies in cold storage. Robotic systems in these facilities can cut costs by 15–25%, while LED lighting reduces energy consumption by up to 75%. Local companies are also making strides. FreshOnTable connects farmers with businesses through a digital cold chain, YallaMarket uses advanced cooling and micro-fulfilment centres for rapid delivery of perishables, and Themar in Saudi Arabia ensures optimal conditions for transporting produce.

Another booming sector is data centre storage. The GCC data centre market is estimated to be worth US$3.5–$4 billion in 2024 and is expected to grow to US$9.49 billion by 2030, reflecting a CAGR of 18.2%. According to Ramez Dandan, Former Regional CTO of Microsoft:

"Strategic partnerships, customer-centric design, and investment in AI-driven infrastructure will define the next phase of GCC's data centre evolution."

IoT and Data Analytics Systems

IoT and data analytics are adding a vital digital layer to warehousing, enabling real-time inventory and operational management. Globally, the IoT in warehouse management market is projected to grow from US$15.56 billion in 2025 to US$34.68 billion by 2032, at a CAGR of 12.1%. In the MENA region, this market is forecasted to grow from US$11.26 billion in 2024 to US$17.93 billion by 2030, at an 8.3% CAGR. IoT applications include asset tracking, environmental monitoring, real-time inventory updates, and improved supply chain visibility. Predictive maintenance can reduce downtime by up to 70%, while demand forecasting helps prevent stockouts or overstocking by 25–40%.

The rollout of 5G connectivity is further transforming real-time data processing. The global 5G IoT market is expected to grow by more than 30% annually through 2025. Edge computing is also enhancing response times for critical warehouse tasks.

Real-world examples highlight these advancements. In January 2024, Honeywell implemented AI and machine learning in its Guided Work Solutions to improve retail operations. This resulted in a 30% productivity boost and up to 99% accuracy in order fulfilment and shelf restocking. Smart warehouses using IoT, AI, and data analytics are becoming the norm, enabling real-time monitoring and predictive maintenance. The smart warehousing market is projected to grow from US$31.21 billion in 2025 to US$46.42 billion by 2030, at an 8.3% CAGR.

However, increased connectivity also brings security risks. Around 80% of logistics companies consider cybersecurity a key factor in their digital transformation. Meanwhile, Robotics as a Service (RaaS) is making advanced automation more accessible, offering flexible solutions with lower upfront costs compared to traditional robotics programmes.

Emerging Markets vs Established Warehousing Hubs: A Comparison

Emerging markets are stepping up as strong contenders to established warehousing hubs. Building on their geographic advantages and evolving infrastructure, regions like the GCC are offering cost-effective and strategically located alternatives to traditional centres in Europe and East Asia.

Cost and Infrastructure Comparison

The global logistics landscape is shifting, driven by stark cost differences between emerging and established markets. For instance, prime warehousing costs in London, a leading established market, reach an average of US$42 per square foot. Sydney follows at US$27 per square foot. On the other hand, emerging markets like India offer much lower costs, ranging from US$3 to US$4 per square foot.

In the GCC, the competitive edge is clear. Bahrain provides operational cost savings of 30–40% compared to its regional counterparts. Meanwhile, the UAE dominates the GCC market with a 45–50% share of total market value, followed by Saudi Arabia at 25–30%. However, rising labour costs and fluctuating energy prices in the GCC add complexity to the cost equation.

Emerging markets are also drawing attention for their quicker power access, affordable land, and less competition for prime locations. However, established hubs still lead in data centre activity, thanks to their mature infrastructure.

These cost dynamics pave the way for a deeper look into regulatory frameworks and market accessibility.

Regulatory Environment and Market Access

Regulatory frameworks vary widely between emerging and established markets. The UAE has positioned itself as a gateway for the region, thanks to its pro-business policies. Dubai and Jebel Ali, in particular, stand out as dominant players in the GCC warehousing market due to their strategic location and business-friendly environment.

Emerging markets like the GCC benefit from their geographical position, bridging East and West, and offering access to rapidly growing consumer markets. For example, in Saudi Arabia, 91% of consumers shop online, with 14% making daily purchases. By contrast, established hubs boast regulatory stability and standardised legal systems, though these often come with higher compliance costs and more complex requirements.

Managing Geopolitical and Economic Risks

Beyond costs and regulations, the ability to manage risks plays a crucial role in market viability. In the GCC, fierce competition among global and regional players can squeeze profit margins. While the region's strategic location offers unmatched access to various markets, it also exposes operations to geopolitical tensions. Established hubs in Europe and East Asia, on the other hand, enjoy more politically stable environments but must contend with challenges like trade disputes and shifting regulations.

Rising vacancy rates in Q4 2023 highlight market oversupply, which could influence cost negotiations. While this oversupply creates opportunities for businesses, it also signals potential market uncertainty.

The UAE’s efforts to diversify its economy away from oil have led to significant infrastructure investments, particularly in Dubai and Abu Dhabi, boosting the resilience of its logistics sector. In contrast, established markets benefit from stable currencies and well-developed financial systems. However, emerging markets often promise higher returns, albeit with greater volatility.

For instance, warehousing costs in North America fell by 3.8% quarter-on-quarter, primarily due to rent reductions in Canada. Meanwhile, the GCC’s warehousing and distribution logistics market, valued at approximately US$15.80 billion in 2025, is expected to grow at a CAGR of 7.54% from 2025 to 2033. This projected growth, combined with cost advantages and strategic positioning, makes emerging markets increasingly appealing despite their inherent risks.

These insights underline the potential for businesses to adapt their warehousing strategies and tap into the opportunities offered by emerging markets.

How to Adapt Warehousing Operations for Emerging Markets

Breaking into emerging markets requires more than just setting up shop - it demands aligning warehousing operations with local laws, adaptable systems, and strong regional partnerships. Companies that successfully navigate these challenges can tap into significant growth potential across the GCC and MENA regions.

Meeting Regional Regulatory Requirements

Navigating regulatory frameworks is a critical first step for effective warehousing in emerging markets. Each country in the MENA region has its own set of rules, and early compliance can save businesses from costly delays.

Safety and Training Standards are a cornerstone in the GCC. Collaborating with local safety authorities and training partners ensures workers meet the region’s stringent safety requirements. Building a strong safety culture through comprehensive training is not just a necessity - it’s a key to operational success.

Customs and Documentation processes vary widely across the region. Tailoring logistics systems to meet the specific requirements of each GCC and MENA country is essential. For companies dealing with hazardous materials, tools like Transportation Management Systems (TMS) can streamline compliance with GSO packaging rules, ADR transport regulations, and local customs requirements in countries like the UAE, Saudi Arabia, and Egypt.

Early Company Registration is vital. Starting the registration process early in countries such as the UAE, Oman, Bahrain, Jordan, and Iraq can help businesses avoid delays in product approvals and market entry.

Non-compliance can lead to heavy penalties. For instance, in 2023, the UAE Ministry of Economy fined 29 companies AED 22.6 million for violations of AML/CFT regulations. Meanwhile, digital governance initiatives and RegTech solutions are reshaping compliance processes, with the RegTech market in the Middle East projected to grow significantly, reaching USD 1.66 million in 2024 and showing an annual growth rate of 18.5% until 2029.

These regulatory demands highlight the importance of scalable and adaptable warehousing systems.

Creating Flexible and Scalable Operations

Emerging markets are dynamic, and warehousing solutions must be able to keep up with rapid changes and growth. Flexible and scalable operations are key to maintaining efficiency.

Modular and Mobile Storage Systems are game-changers for flexibility. Modular setups can improve inventory space use by up to 30%, while mobile shelving can reduce storage footprints by 20%. These systems allow warehouses to adapt layouts on the fly, making it easier to handle fluctuating inventory levels and optimise available space.

Multi-Client Warehousing offers a cost-effective way to scale operations. By sharing facilities, businesses can cut costs without sacrificing flexibility. The global multi-client warehousing market, valued at around USD 27.5 billion, is expected to grow at an annual rate of 8% over the next decade.

Technology Integration is the backbone of modern warehousing. Automation, IoT, and cloud-based Warehouse Management Systems (WMS) enhance flexibility and scalability. Cloud-based WMS platforms are especially useful for multi-client setups, making them a popular choice across the region.

Sustainability Practices are becoming a priority. Shared warehousing models not only reduce costs but also lower carbon footprints by maximising space use and cutting energy consumption. Companies are increasingly adopting eco-friendly measures like solar power and energy-efficient lighting to meet sustainability goals. The rise of e-commerce and advancements in automation continue to fuel innovation in this sector.

Flexibility and scalability are only part of the equation. Building a skilled workforce and fostering strong partnerships are equally important.

Workforce Development and Regional Partnerships

Thriving in emerging markets requires more than just advanced facilities - it demands cultivating local expertise and forming strategic partnerships. The GCC logistics sector, in particular, faces talent shortages that call for focused solutions.

Bridging Skills Gaps in logistics is a pressing issue. The region needs trained professionals in roles like supply chain management, port operations, and railway logistics. Companies can address this by partnering with educational institutions to offer specialised courses in these fields.

Strategic Partnerships demonstrate the power of collaboration. For example, Gulf Warehousing Company (GWC) expanded its presence in Saudi Arabia by teaming up with GFH Financial Group to develop 200,000 square metres of Grade 'A' logistics infrastructure. Similarly, JAS and Naqel’s 2025 partnership combines JAS’s global expertise with Naqel’s regional network to align with Saudi Arabia’s Vision 2030 goals. As Erwin Wittemaier, Area VP of JAS Middle East, explained:

"This partnership marks an exciting milestone for JAS as we expand our presence in Saudi Arabia. By combining our global reach with Naqel's deep-rooted regional expertise, we can unlock the full potential of the highly promising Saudi Arabian market."

Public-Private Collaboration is another critical factor. Partnerships between governments and private companies are helping to improve cross-border trade systems and rail networks across the GCC. Industry leaders are also advocating for a unified GCC Customs Union and standardised protocols to streamline regional logistics.

Technology-Driven Partnerships are shaping the future of warehousing. Matthew Kearns, Acting Group CEO of Gulf Warehousing Company, highlighted the role of innovation:

"By leveraging AI, AR, robotics, automation and green logistics solutions, we can improve efficiency while contributing to a more sustainable future. Regional collaboration will be key to unlocking new opportunities and maintaining our global advantage."

These partnerships not only drive technological advancements but also help develop local talent, ensuring long-term growth and sustainability in these fast-evolving markets.

Conclusion: Emerging Markets' Warehousing Advantages

Emerging markets in the GCC and MENA regions are transforming the global warehousing landscape by combining cost efficiencies, prime geographic positioning, and cutting-edge technology with modern infrastructure and a focus on sustainable development.

Take Saudi Arabia, for example, where industrial land costs between US$10 and US$50 per square metre, a stark contrast to the US$150 to US$600 per square metre in established US hubs like Northern Virginia. Electricity prices in Saudi Arabia and the UAE, ranging from US$0.05 to US$0.06 per kWh, are also considerably lower than the US average of US$0.09 to US$0.15 per kWh. These cost savings translate into significant operational benefits for businesses.

On top of that, infrastructure development in the region is moving at an impressive pace. The MENA region boasts a project pipeline valued at USD 3.7 trillion, with the GCC accounting for over 84% (USD 3.1 trillion) of this investment, building logistics and transport infrastructure that competes with established global hubs.

The technological growth in the Middle East is equally noteworthy. The region’s data centre capacity is expected to triple from 1GW in 2025 to 3.3GW within five years. Saudi Arabia, in particular, has launched the Cloud Computing Special Economic Zone (CCSEZ), offering tax incentives and streamlined processes to attract foreign investment. By 2030, this zone is projected to account for 30% of the Kingdom’s ICT spending.

Sustainability is another key driver. In 2023, Masdar introduced a facility aimed at generating 1GW of renewable energy by 2027, supporting energy-intensive operations like data centres and positioning the region as a leader in sustainable warehousing. Together, these factors provide a roadmap for businesses to thrive in this evolving market.

Key Points for Decision-Makers

1. Strategic Positioning: The Middle East’s location as a global data and logistics hub is underpinned by an extensive network of submarine cable systems and strong international trade relationships. This makes the GCC an ideal base for serving global computing and logistics demands.

2. Supply Chain Resilience: Many MENA countries import up to 85% of their food, highlighting the importance of diversified supply chains. Companies like Al Dahra and Silal are already securing food supply chains through large-scale operations across Africa, ensuring resilience in the region.

3. Government-Driven Confidence: Ambitious national plans such as Saudi Arabia’s Vision 2030, Abu Dhabi’s Economic Vision 2030, and Dubai’s 2040 Urban Master Plan are driving large-scale investments in energy, transport, and digital infrastructure. For example, Saudi Arabia has committed US$21 billion to expand the Riyadh Metro as part of its Vision 2030 goals.

4. Collaborative Opportunities: Leading organisations like Masdar, DP World, Abu Dhabi Ports, and ACWA Power are expanding their global presence while leveraging expertise in renewable energy, logistics, and digital infrastructure. These partnerships open doors for international businesses to tap into established networks and local expertise.

FAQs

Why are regions like the GCC and MENA emerging as key players in global warehousing strategies?

The GCC and MENA regions are stepping into the global spotlight for warehousing, thanks to their booming economies, strategic infrastructure upgrades, and prime geographic location. In the GCC, warehousing is set to see notable growth, fuelled by improvements in ports, airports, rail systems, and specialised logistics zones. Meanwhile, the MENA region benefits from a surge in trade activity, reduced tariffs, and a massive pipeline of development projects worth over AED 13.6 trillion.

What sets these regions apart is their geopolitical stability, business-friendly trade policies, and close proximity to major international markets. These factors make them increasingly appealing compared to traditional warehousing hubs. For businesses aiming to streamline their supply chains and tap into emerging markets, the scalability and resilience of these regions offer a compelling opportunity.

How is sustainability influencing warehousing strategies in emerging markets, and what steps are being taken to address environmental challenges?

Sustainability is reshaping warehousing strategies in emerging markets, with businesses turning to renewable energy sources like solar and wind power. By adopting energy-efficient systems, companies aim to minimise their environmental footprint while staying compliant with changing regulations. These initiatives not only cut carbon emissions but also strengthen the resilience of operations.

In addition, emerging markets are upgrading their logistics infrastructure to accommodate eco-friendly technologies and reduce reliance on fossil fuels. By incorporating practices like waste reduction and optimised energy consumption, these markets are aligning their warehousing operations with international environmental standards, ensuring both economic growth and environmental responsibility in the long run.

How are technologies like IoT and AI revolutionising warehousing in emerging markets, and what does this mean for supply chain efficiency?

Technologies like IoT and AI are transforming the way warehousing operates in emerging markets. By automating tasks, improving accuracy, and enabling real-time decision-making, these tools are reshaping the industry. For example, IoT sensors allow for precise tracking of inventory and monitoring of storage conditions, while AI-powered systems streamline workflows, predict demand, and eliminate inefficiencies.

In the Gulf and MENA regions, these advancements are making supply chains far more efficient. Automated systems cut down on manual errors, enhance productivity, and improve risk management, creating operations that are both resilient and scalable. This shift is enabling businesses to meet rising market demands while staying competitive in the global supply chain arena.

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