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You are here: Home / News / Warehouse News / Warehousing in China Displays Distinct Dynamics

Warehousing in China Displays Distinct Dynamics

Warehousing in China Displays Distinct Dynamics

View original at logisticsviewpoints.com

On May 15, China Europe International Business School ( CEIBS ) and the ZGC Innovation Center organized a forum on digital innovation at Z-Park in Cambridge, MA. While attending the event, I had the opportunity to speak with Dr. Xiande Zhao, Director of CEIBS-GLP Centre of Innovation in Supply Chain and Services. He provided me with some valuable insights on warehousing and logistics in China. China is an increasingly important market to international warehouse automation and WMS providers. It is large, growing rapidly and offers great growth opportunities. As a result, the topic of warehouse technology investment in China comes up often in my discussions with technology providers. However, I have found it more difficult to engage in direct discussions with Chinese practitioners. My discussion with Dr. Zhao bridged that gap and provided me with the pulse of warehousing in China. Our discussion focused on the competitive dynamics in the Chinese warehousing environment, the forces at play, and ways in which it differs from the environment in the United States. The hard factors at play are similar in both markets. Warehouse automation investments are capital costs that reduce the variable costs of fulfillment, increase throughput, and decrease manual labor costs. However, the differences lie in the relative impact of these factors, the broader warehousing environment, and the secondary effects and competitive opportunities that can arise from these investments. China Warehousing Market Dynamics For starters, e-commerce represents almost 25 percent of retail sales in China, compared to approximately 10 percent of US retail sales. E-commerce growth is placing high demands on warehouse throughput and labor requirements in both countries. However, the magnitude of change is notably larger in China. The difference in labor cost growth is also substantial. Dr. Zhao stated that labor costs in China have risen approximately 500 […]

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Sue Boczenowski is the Marketing Manager for Abel Womack.

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