The global industrial distribution market was valued at $7.72 trillion in 2022 and is forecasted to reach $11.93 trillion by 2032, growing at a compound annual growth rate (CAGR) of 4.5%.
Regarding product types, the industrial distribution market includes the following categories:
• Auto parts
• Building products
• HVAC and plumbing
• Hand tools and power tools
• General Industrial
• Maintenance repair and operations (MRO) supplies
• Electrical equipment and supplies
• OEM supplies
• Office equipment and supplies
The IT segment held the largest market share for product types in 2022. The MRO segment is forecasted to see the most significant market growth by 2030, as damaged equipment can lead to losses for a company, impacting profitability. The failure of a single part from expensive equipment, causing it to sit idle, can cause a considerable loss. This delay in production would impact market growth.
The largest segment by application is the offline segment, with a market share of 76.27% in 2022. By 2030, the offline feature expects to have the largest market share still, growing in coming years due to the increased availability of many parts of the manufacturing devices through the online mode. In addition, offline is more efficient in providing consumers with delivery options and competitive prices.
The e-commerce segment is also forecasted to have a robust CAGR in coming years as manufacturers focus on cultivating better customer loyalty through better consumer experiences.
North America has dominated the market in 2021 and expects to have the largest market share through 2030. This region's industrial distribution growth is due to the increased investment in supply chain logistics and transportation. As a result, a significant portion of the market revenue in 2022 was generated in the United States (35.66%).
Europe also expects growth in the coming years, as industrial distributors are functional across many sectors, driving the market growth. Also driving the market is automation and increasing demand for distribution outsourcing.
Market Trends and Growth Drivers
Among the trends and factors currently shaping the global industrial distribution market are economic growth, technology, e-commerce, globalization, sustainability, and rising demand. Also driving the market is changing consumer behaviors. For example, increased use of e-commerce is causing customers to seek faster delivery, low to no shipping costs, 24/7 customer service, and online order tracking. This advanced online revenue will help many major manufacturers shift to digital practices, and increased use of intelligent products will also lead to growth in the market.
Consumers are also demanding transparency in shipping practices. To meet these consumer demands, industry investment focuses on providing technological innovations that will, in turn, provide growth for the market.
Increased use of order management systems is helping to provide automated systems for regular tasks, reducing any errors made. These systems expect to help gather information regarding product availability and delivery location. In addition, the Internet of Things (IoT) is helping to track warehouse and shipping containers, helping to drive market growth. Using the IoT and Industry 4.0 tools to predict traffic will also improve functionality within the industrial distribution space.
Market growth will also stem from the increased use of artificial intelligence (AI), robotics, cloud computing, and analytics to collect data and automate actions and workflow to reduce human errors and enhance productivity in the industry. In addition, with advanced sensors, embedded software, and robotics, smart factories can collect and analyze data to make better decisions and create more value.
It is a highly dynamic market, and companies that adapt to new trends and challenges will likely be the most successful. Also, increasing renovation in technology will give distributors a competitive advantage.
Another opportunity for growth in the market is a collaboration between different distributors. Having a centralized management system will provide a unified experience across all distribution channels, allowing other channels to work together and communicate in real-time, enhancing the speed of delivery and reducing errors.
Competitive Risk for Large Enterprises
Many companies are engaged in industrial distribution worldwide, with low industry concentration. At the same time, it is in a state of evolving competition. Existing companies show relatively strong competitiveness, yet other companies are entering the sector with solid capital, production scale, and technological advantages. With upstream and downstream bargaining power, they may constitute small- and medium-sized enterprises. Some smaller production enterprises that adopt low-price and low-quality competitive strategies may disrupt the market.
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
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