Route Optimization Software Market - Forecasts from 2022 to 2027

The route optimization software market is expected to grow at a compound annual growth rate of 12.86% over the forecast period to reach a market size of US$6.713 billion in 2027, from US$2.878 billion in 2020. Route Optimization Software is a specially designed software that is generally used in food delivery services, taxi services, logistics, E-commerce, etc. to track and plan the journey of a delivering driver improves the driver's efficiency and also enhances customer service. Route Optimization Software includes reporting features and GPS-aided technologies that automate manual planning by providing efficient routes for the entire fleet.

Market Trend:

The increased use of smartphones, powered by efficient technology and internet connectivity, is expected to drive the market in upcoming years. Besides that, expanding food delivery services and e-commerce around the globe are expected to boost the market. Also, Artificial Intelligence, Cloud Services, and the Internet of Things in software development are expected to have a key role in market development. Slow internet connections due to some technical glitches and the rising risk of a security breach with the increasing cyber-crime rate is a major challenge for the growth of the market in the long term.

Growth Factors

• E-commerce and online delivery platforms are on the rise:

One of the major growth factors for the route optimization software market is the rise of e-commerce and online delivery, platforms. Companies in retail businesses, food, and beverage delivery business, and medical services are continuously enhancing their platforms and transforming their businesses, which is expected to provide a major growth opportunity for the route optimization software market. According to UN trade and development experts, the UNCTAD e-commerce sector witnessed a rise in its share of all retail sales, from 16% to 19% in 2020. Global e-commerce sales increased four percent year on year to $26.7 trillion in 2019. These rising statistics stand in favour of the development of the route optimization software market in the coming years.

• Internet usage has provided a major boost to the market:

With the increasing adoption of the internet by people around the globe, the route optimization software market stands a good chance of development. With the increasing penetration of internet connectivity to the rural areas and non-developed regions, the growth guarantee for the market stands on a great platform. According to the data provided by the World Bank, internet usage has increased significantly around the globe. With just 6.734% of the world population using the internet in 2000, the number has increased to 56.7275 in 2019. With internet connectivity comes the possibility of development, and thus the adoption of technology as it becomes more accessible can provide a significant boost to the route development software market. Restraint

• Data privacy is a major challenge for market growth:

The increasing rate of cyber security breaches around the globe is expected to pose a serious threat to the growth of the route optimization software market. The leak of data through cyber-attacks gives complete information about the orders placed by the end-user, and this leak not only causes difficulties for the consumers but also raises questions about the reputation of the organization. Data privacy has become a huge concern not just for end-users but also for governments around the globe. As per the data collected by ITRC (Identity Theft Resource Center) and the U.S. Department of Health and Human Services, around 98.2 million individuals were impacted by the 10 biggest data breaches in the first half of 2021.

Other restraints to the growth of the Route Optimization Software Market include technological flaws and slow internet connections in some areas.

The COVID-19 Pandemic's Impact

The impact of the coronavirus pandemic did affect the route optimization software market initially. With the fear of mutation and the fast transfer of disease around the globe, the lockdown restrictions and curfews were initiated by the economies. Due to the pandemic, many companies and businesses shut down, and their operations were hampered. With less vehicle movement, the demand for route optimization software went down. But with some ease in restrictions, companies operating from home, and with operations back on track, the demand for online delivery stores witnessed a surge. To limit the contact between people, grocery delivery, medication services, food services, etc. witnessed a rise, which thus contributed towards the growth of Route Optimization Software. According to a report by UNCTAD, online business-to-consumer (B2C) sales for the world's top 13 companies stood at $2.9 trillion in 2020. Some companies, like PTV Group, provided free scheduling and route optimization software temporarily to critical industries and businesses in healthcare-related industries.

Segmentation:

• By Product

Software

Services

• By Application

Food Delivery

Ride-Hailing and Taxi Services

E-commerce

Others

• By Deployment

On-Premises

Cloud

• By Geography

North America

• USA
• Canada
• Mexico

South America

• Brazil
• Argentina
• Others

Europe

• U.K.
• Germany
• France
• Others

Middle East and Africa

• UAE
• South Africa
• Israel
• Saudi Arabia
• Others

Asia-Pacific

• China
• Japan
• India
• Australia
• Taiwan
• South Korea
• Others