Chinese e-commerce firms enhance overseas warehouse network

Updated: September 27, 2022 Source: China Daily
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Chinese logistics firms are beefing up efforts to invest in logistics infrastructure and launch overseas warehouses in a key step to bolster the development of cross-border e-commerce and ensure the stability of industrial and supply chains, industry experts said.

JD Logistics, the logistics arm of Chinese e-commerce giant JD, said it plans to speed up infrastructure construction globally and build more overseas warehouses in the Americas, Europe, Southeast Asia, Australia and the Middle East, where Chinese enterprises are accelerating steps to expand business activities with the e-commerce penetration rate continuing to rise.

So far, the company has launched self-operated overseas warehouses in the United States, Germany, the Netherlands, France, the United Kingdom, Southeast Asia, the Middle East and Australia, said Ji Jie, general manager of International Warehousing and Distribution at JD Logistics.

The company operates approximately 90 overseas warehouses, covering an aggregated floor area of nearly 900,000 square meters.

Ji said intelligent logistics technologies, ranging from automatic sorting robots to driverless vehicles, have been used in overseas warehouses to improve delivery efficiency and reduce operational costs.

JD Logistics announced in June the opening of its first automated warehouse in Los Angeles. The total area of JD's warehouses in the US has reached nearly 92,900 million square meters, connecting logistics hubs in the eastern, central and western parts of the US, so as to provide next-day delivery services for major cities in the country.

Chinese enterprises are facing mounting uncertainties, such as fluctuations in the shipping and air cargo market, Ji said. "As key infrastructure in the new form of foreign trade, overseas warehouses can alleviate uncertainties in global supply chains and drive high-quality growth of foreign trade."

She added the efforts to accelerate the construction of overseas warehouses are of significance in helping cross-border e-commerce platforms boost delivery efficiency, reduce logistics costs and improve user experience, as well as allowing global consumers to access high-quality Chinese brands and products.

"Overseas warehouses serve as a vital infrastructure that boosts growth in the nation's cross-border e-commerce sector," said Zhang Zhouping, a senior analyst of business-to-business and cross-border activities at the Internet Economy Institute, a domestic consultancy, adding such facilities enable quicker Customs clearance, faster delivery and lower costs.

Zhang said overseas warehouses are playing a critical role in enhancing delivery efficiency, and ensuring the stability of the supply and industrial chains.

The development of overseas warehouses has been high on the government's agenda in recent years. The Ministry of Commerce said earlier this month it will work with other departments to roll out measures to support logistics enterprises and cross-border e-commerce platforms and sellers to build overseas warehouses.

Cainiao Network, the logistics arm of Alibaba Group Holding Ltd, announced in August the launch of its first automated distribution center and overseas warehouse in Israel. This is its first automated distribution center in the Middle East and 10th globally.

The distribution center and overseas warehouse will play a key role in enhancing cross-border logistics fulfillment services, as part of Cainiao's ongoing commitment to strengthening its global logistics network and optimizing end-to-end cross-border logistics offerings.

The warehouse in Israel is equipped with smart logistics equipment, and offers integrated warehouse and distribution services to reduce logistics costs by 10 percent, as well as facilitate parcel deliveries within three working days. Currently, Cainiao's overseas warehouses cover more than 30 countries and regions in Asia, Europe and the Americas.

"The COVID-19 pandemic has highlighted the importance of stable and efficient cross-border logistics services, as more merchants shift online to tap into a wider overseas consumer base," said Liu Xinyang, general manager of Cainiao Export Logistics.

Liu underlined the need to streamline and digitalize logistics capabilities and services, as well as the cross-border supply chain. "Cainiao will continue its commitment to building global logistics infrastructure and enhancing end-to-end global fulfillment services to better support export merchants in their cross-border businesses."

Lu Zhenwang, CEO of Shanghai-based Wanqing Consultancy, said Chinese online retailers are accelerating steps to expand their footprint in overseas markets to seek new sources of revenue in the face of fierce competition in the domestic market.

"Establishing overseas warehouses will not only promote Chinese brands and products internationally and enhance the competitiveness of Chinese foreign trade enterprises, but also introduce a large number of overseas products to Chinese consumers," Lu said.

Editor: Yu Huichen