Canada based e-commerce firm Shopify has acquired 6 River Systems through a $450 million deal to enhance its supply chain system and logistics management. The deal includes a 60 per cent cash consideration and 40 per cent Shopify stock. The cloud-based software platforms at Shopify enable sellers from across the world to avail built-in online storefronts. Boston based 6 River System has a wide range of clientele and a base of over 20 facilities across the US, Canada and Europe that provide fulfilment solutions to e-commerce firms and retail operators. Through this deal, Shopify intends to incorporate 6 River Systems’ warehouse automation technologies to rank up its delivery process and increase the efficiency of warehouse operations.

Upgrading technology: A shot in the arm

At a time when the e-commerce market has witnessed rapidly growing competition, the race to be on top of the game demands investment in the best and latest technology. The acquisition of 6 River Systems by Shopify intends to augment the Fulfillment Network Service that Shopify had launched earlier this year. The service is a machine learning-enabled inventory allocation technology which facilitates merchants to locate the most convenient and accessible fulfilment centres for their online business. With e-commerce giants like Amazon providing a two-day delivery through its Prime package, the latest acquisition by Shopify intends to catch up in the game. Coupled with its new fulfilment network service, the 6 River Systems robotic services will aim at reducing shipping costs at Shopify and facilitate quicker delivery to users.

Anti-Amazon move?

Back in 2012, Amazon had acquired Kiva Systems in a $775 million deal to strengthen its operational efficiency and improve profit margins. The deal allowed Amazon to tap on to the Kiva robots and their advanced inventory management system. Kiva’s systems were revolutionary back in those days and it enabled Amazon to boost its delivery performances. It is noteworthy that, two of the three co-founders of 6 River Systems previously worked with Kiva until it was bought by Amazon. Technology pundits have refereed to Shopify’s acquisition of 6 River Systems as an anti-Amazon move as the Canadian company strives to catch up with Amazon by strengthening its warehouse automation resources. While Kiva Systems, rebranded as Amazon Robotics after its acquisition, ceased to deliver warehouse automation solutions to its previous clients, reports of the recent acquisition state that 6 River Systems will continue to build robotics solutions to global clients including the likes of Lockheed Martin and DHL.

What’s ahead

The rapidly evolving technology arena and rising customer expectations are paving the way for warehouse automation market to bloom. Technologies such as IoT, advanced sensors, real-time tracking of inventories, automated storage and retrieval systems, are being employed increasingly by several players in sectors like manufacturing, distribution and e-commerce. Robotic firms like Kiva and 6 River Systems are bound to add advanced features in their arsenal to cater to the rapid demands in warehouse automation.

The presence of technical players in the field of warehouse automation is evenly spread out across the world. Beijing based Geek Plus has contributed to the rising disruption in the supply chain automation market in Asia-Pacific through its innovative products that include automated forklifts and automated mobile robots for warehouses in different sectors. KUKA AG, a Germany based automation systems provider has been developing automated robotic solutions for food, glass and wood industry, apart from its long record of producing heavy industrial robots.

On the global scale, players in the Asia-Pacific region are predicted to dominate the warehouse automation market due to the rapid growth of e-commerce and automation in sectors like food, pharmaceutical and electronics. Warehouse automation in the North America and Europe region looks equally promising given the substantial growth of automation in industrial activities like palletizing, packaging, transportation and manufacturing.

A research by LogisticsIQ predicts the warehouse automation market to reach $27 billion by 2025. The competition among e-commerce players such as Shopify and Amazon can only usher the development of smarter warehouse automation solutions.

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