Industrial Distribution Market size was valued at USD 8.10 trillion in 2023 and is set to reach USD 13.6 trillion by the end of 2036, expanding at around 4.5% CAGR during the forecast period i.e., between 2024-2036. In 2024, the industry size of industrial distribution is estimated at USD 8.56 trillion.
The growth of e-commerce is a major driver of the industrial distribution market. As online retail expands, there is a surging need for efficient and scalable distribution systems to handle increased order volumes, manage inventory, and ensure timely deliverables. Global retail e-commerce sales reached a total of USD 5.8 trillion in 2023. This number is expected to expand by 39% over the next few years, surpassing USD 8 trillion by 2027.
Additionally, as businesses expand their operations across borders, they require more sophisticated distribution networks to manage international supply chains efficiently. This includes handling cross-border logistics, complying with varying regulatory standards, and optimizing global inventory management. The need for reliable, scalable, and flexible distribution solutions to support global trade and supply chain complexities fuels growth in the industrial distribution market.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
4.5% |
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Base Year Market Size (2023) |
USD 8.10 trillion |
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Forecast Year Market Size (2036) |
USD 13.6 trillion |
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Regional Scope |
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Product (MRO Supplies, Electrical Equipment and Supplies, OEM Supplies, Hand Tools and Power Tools, Bearings, Office Equipment and Supplies)
The MRO supplies segment is expected to garner the highest share of 35.1% in the industrial distribution market on account of the rapid increase in maintenance, repair, and operations (MRO) demand. For instance, the global need for MRO is projected to rise from USD 68 billion in 2021 to over USD 115 billion by 2031. As industries expand and modernize, the demand for MRO supplies grows to support new and existing machinery. Furthermore, companies are increasingly adopting preventive maintenance practices to avoid costly breakdowns, leading to higher consumption of MRO supplies.
Application (E-commerce, Offline)
The offline segment in the industrial distribution market is estimated to gather substantial CAGR by the end of 2036. The segment expansion is due to the increasing number of small businesses across the globe. Particularly, in 2021, there were projected to be around 332 million small and medium-sized business enterprises (SMEs) globally. Significant growth in the offline industrial distribution market can be witnessed due to the presence of many smaller enterprises. This provides a sensible, cost-effective means to connect with other organizations, and is considered the most effective strategy to outsource supply chain management or assist in lowering a customer's total cost or ownership.
Our in-depth analysis of the industrial distribution market includes the following segments:
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Product |
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Application |
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Industry Type |
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North America Market Statistics
The industrial distribution market in North America is projected to hold the largest market share of 42.5%. The growth in the region is credited to the rising adoption of advanced technologies including the Internet of Things (IoT). Manufacturing, healthcare, energy, transportation, and retail sectors in North America utilize IoT analytics to optimize inventory levels and increase supply chain effectiveness. Almost 55% of businesses in North America employ IoT technology for business-related activities.
The U.S. has tremendous growth potential in the logistics industry due to its established logistics infrastructure and improved industrialization, which are expected to drive market expansion. Business logistics expenses in the United States reached a new high of USD 2 trillion in 2022, accounting for over 9% of the country's GDP.
The market in Canada will be led by surging investments by the government to fortify the nation's supply networks. In April 2022, the Ontario government announced an investment of over USD 5 million in the Ontario Automotive Modernization Program, to enhance competitiveness and support the province's auto-parts supply chain.
APAC Market Analysis
Asia Pacific will register a tremendous CAGR of 9.3% in the industrial distribution market owing to rapid urbanization, and industrialization. Asia is set to undergo a period of unprecedented urbanization, which might increase demand for industrial distribution by driving up city-based consumption of goods and services. According to the World Bank, with an average yearly urbanization rate of 3%, East Asia and the Pacific are the regions that are urbanizing the fastest in the world.
Japan is expected to lead the world in automation, robotics utilization, and integrating artificial intelligence into everyday life in several industries including food, medicines, and logistics. This may drive the market demand for industrial distribution.
Similarly, China has quickly emerged as the world leader in automation and aspires to be the global leader in robotics once it achieves self-sufficiency in the sector. Moreover, large-scale infrastructure projects, such as transportation networks and urban development, are driving the need for industrial products and services.
South Korea has a highly developed manufacturing sector, including industries such as electronics, automotive, and shipbuilding, which drives demand for industrial products and services. The market in the country is robust and expanding, supported by its advanced manufacturing capabilities, technological advancements, and strategic infrastructure investments.
The competitive landscape of the industrial distribution market is characterized by the dynamic interaction of several factors that influence market positioning and strategy. Key considerations include an increased emphasis on technical advancements like automation and data analytics, which improve operational efficiency and inventory management.
Author Credits: Richa Gupta
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