E-commerce Growth in China, by Journal of Commerce
E-commerce is growing exponentially in China, creating both challenges and opportunities for international shipping and logistics companies, according to an April 2 article in Journal of Commerce (login required) by Greg Knowler. Companies like UPS, FedEx and DHL Express, in particular, must leap hurdles such as regulatory constraints on foreign operators, fierce competition in domestic distribution and price-conscious consumers.
“Despite the challenges,” the article reports, “it is impossible for the integrators to ignore a sector of the market that generated close to 200 billion transactions last year as volumes grew more than 60 percent over 2012.” Competition is coming from local express carriers, state-owned China Post and Alibaba, the gigantic Internet company that also operates China’s largest online shopping websites. Alibaba founder Jack Ma announced last May “that he had formed a consortium of retailers and courier companies that, along with a $16 billion investment he planned to inject over the next eight years, would create a nationwide logistics platform.”
Speakers at the Cargo Facts Asia conference in Hong Kong on April 2 added that UPS is working on integrating its domestic and international networks to connect China to the U.S. and Europe, and China is attempting to reform the e-commerce distribution market, in part by allowing several cities to participate in a pilot cross-border program.
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