Global warranty management system market is expected to witness growth due to increasing product complexities and consumer demands
Global Warranty Management System Market is estimated to be valued at US$ 6.13 Bn in 2024, exhibiting a a CAGR of 13.7% over the forecast period of 2024-2031. Warranty management systems allow businesses to effectively handle warranty claims, process repairs, and analyze trends to improve product quality. Furthermore, increasing complexities in modern products and the rising expectations of consumers are compelling manufacturers to rely more on digital warranty solutions.
Market Dynamics:
Growing product complexities pose challenges for warranty administration. Modern appliances, vehicles, and electronics contain hundreds of sophisticated components that require stringent documentation and servicing processes. Legacy paper-based systems are unable to effectively manage high volumes of warranty data for complex products. Warranty management systems provide digitized record-keeping of device specifications and repair histories. This helps organizations reduce claims processing time and costs.
Consumers nowadays expect transparency into repair statuses and real-time updates on service schedules. These also want the flexibility to manage claims from any location via mobile apps. Warranty management systems provide branded portals that improve the consumer experience. These also allow personalized communications using data analytics.
Increasing Demand for Aftermarket Services
Growing demand for aftermarket services from customers can drive the global warranty management system market growth. Customers nowadays expect seamless after-sales support for the products purchased whether it is a car, electronics or home appliances. Warranty management systems help companies to efficiently manage warranty claims, repair requests and track service history to provide a superior after-sales experience. This improves customer satisfaction and builds brand loyalty. As the aftermarket services sector continues to expand globally, especially in emerging markets, there will be huge need for warranty management solutions among automotive, electronics and manufacturing companies.
Growing Complexity of Warranty Programs
With technological advancements, products are becoming more complex and this has increased the complexity of warranty programs offered by manufacturers. Traditional manual methods of handling warranty claims are inefficient to manage complex extended warranty programs that involve multiple tiers of coverage. Warranty management systems provide customizable solutions to help companies structure sophisticated multi-tier and multi-party warranty programs. These offer visibility into warranty cost structure and help optimize programs. The ability of WMS to effectively manage intricate warranty programs is can boost their adoption across industries like electronics, heavy equipment and aircraft manufacturing that offer complex warranty coverage.
High Initial Investment Requirements
Warranty management solutions require substantial initial investments to purchase software licenses, implement, integrate with other systems and train staff on new processes. This high upfront cost deters many small and medium enterprises from investing in WMS. For large organizations, the implementation and integration phase requires diverting significant IT resources that increases project costs. This high initial investment requirement poses a challenge, especially for companies operating on tight budgets with limited Capital expenditures (CapEx). The total cost of ownership also needs to be justified with tangible returns which discourages some prospective buyers.
Lack of Awareness Hampers Growth in Developing Markets
Warranty management is a relatively new concept in developing markets as compared to developed regions. Many smaller manufacturers and dealers in emerging economies are still not aware of how WMS solutions can optimize their after-sales service operations. The lack of awareness about the available features and functionalities that help improve efficiency can hamper the market growth in regions like Asia Pacific, Middle East, and Africa. Even amongst informed companies, the perception of warranty management as a non-priority item can limit its adoption. Overcoming this lack of awareness through focused marketing campaigns can help unlock the untapped potential in developing markets.
Open API Integrations Expand Business Opportunities
Warranty management system vendors recognize open APIs as a significant opportunity to drive new revenue streams. Developing API integrations allows WMS to seamlessly connect with various third-party applications used across the product lifecycle. This facilitates data exchange and expands the purview of warranty programs. For example, connecting with dealer management solutions offers visibility to field service operations. Integrating with product lifecycle management (PLM) tools provides access to engineering specifications. Such integrations deliver valuable insights across the value chain. These also help WMS providers target larger enterprise accounts.
Usage-Based warranties Create Scope for Telematics Integration
Rising trend of usage-based warranties, especially in the automotive sector, can offer opportunities for WMS vendors. Usage-based programs determine warranty coverage based on actual vehicle usage parameters rather than time. This requires integrating warranty platforms with telematics solutions to track mileage, engine performance, and driving behavior data. WMS providers that offer capabilities to design, track and settle non-time-based warranty claims have a competitive advantage as telematics data becomes central to warranty programs. The ecosystem of connected vehicles can boost demand for such usage-driven warranty management backed by integration with telematics functions.
Link - https://www.coherentmarketinsights.com/market-insight/warranty-management-system-market-4340
Key Developments:
- In September 2022, AAR subsidiary Airinmar, a leading independent provider of component repair cycle management and aircraft warranty solutions, signed a new service agreement with Philippines-based low-cost carrier- Cebu Pacific. Under this agreement, Airinmar will provide Cebu Pacific with a comprehensive suite of support services, including aircraft warranty management and value engineering, to optimize the airline's maintenance spend and reduce component repair costs.
- In May 2022, as part of its business transformation strategy for WMS Group (UK) Ltd (WMS), Opteven launched a highly accessible and market-leading online claims platform for WMS dealers and repairers. This new platform aims to simplify and accelerate the warranty claims process, thus, reducing administrative time and providing a comprehensive and exceptional customer service experience.
- In April 2022, Hikvision, a leading IoT solution provider with video as its core competency, extended its global warranty on premium project products to five years. This new warranty is designed to simplify project maintenance and enhance cost efficiency for Hikvision customers.
- In June 2020, U.S.-based MSX International launched an advanced warranty management system aimed at eliminating warranty waste and streamlining business processes. This innovative development has helped boost growth and increase the market share of the companies utilizing the system.
Key Players:
Clyde Technologies, Inc., Infosys Limited, Inspirisys Solutions Limited, Lumanu Inc., Mavrck, ONALYTICA, Oracle Corporation, Pegasystems Inc., PTC Inc., SAP SE, Simply Warranty, Snap-On Business Solutions, Inc., Tavant, Tech Mahindra, Upfluence
