Market Trends of China Third-Party Logistics (3PL) Industry
Increase in E-commerce Sales Driving the Market
- In 2022, China, the world's largest e-commerce market in terms of sales, belonged to the innovators, the enthusiastic, and the daring, and their consumer behaviour provides a road map for the year ahead. According to research firm Insider Intelligence, around 1 billion local consumers would shop on e-commerce channels across China in 2022, accounting for 45.3% of total retail sales online.
- Outdoor sports and pet care in China expanded outside narrow communities, while virtual influencers and the metaverse demonstrated the potential to alter online retail. The rising purchasing power of Generation Z customers fueled expansion in all of these categories, from collectable toys to non-alcoholic beverages. Because of the rapid pace of change in China, staying current on trends is critical for any brand and retailer to excel in the country's e-commerce market.
- According to an industry assessment, at least 89 online shopping sites in China were terminated last year as the business battled with strict Covid-19 control measures, tough rivalry, and sluggish consumer spending amid a slowing home economy. According to a report published this week by retail data provider Linkshop.com, which is based in eastern Zhejiang province, online shopping guide websites were the hardest hit, with 32 of these platforms shutting down, accounting for about 36% of overall casualties last year in the world's largest e-commerce market. According to the survey, approximately 20 so-called complete e-commerce platforms ceased operations last year. Eleven social e-commerce sites and the equivalent number of community group-buying platforms also went out of business.
Understand The Key Trends Shaping This Market
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Growth in Warehousing Sector Driving the Market
- The expansion of the warehousing industry is influenced by several factors, including increased e-commerce demand, the expanding presence of third-party logistics providers, and the rising consumption of frozen and perishable foods. The rising popularity of frozen and perishable goods is driving industry expansion. In China, factors such as rising disposable incomes, shifting consumption patterns, and rapid urbanisation are driving demand for frozen and perishable food goods. Because these products have a substantially shorter shelf life, they must be stored at controlled temperatures. As a result of the increased consumption of frozen and perishable foods, China's cold chain market is expanding. Consumption of products such as beef, which typically requires a cold chain to prevent deterioration, has increased.
- The emergence of multistory warehouses is a new market growth trend. The expansion of China's e-commerce business has increased demand for warehouse and storage facilities. E-commerce delivery is heavily reliant on last-mile providers. One idea for improving last-mile service is to locate warehouses as close to the consumer as possible to reduce delivery time. Rental prices for warehouse spaces are likely to rise during the predicted period as land in major cities becomes scarce and expensive, particularly in key commercial centres such as Shanghai and Beijing.
