As China's economy starts to be rebound from recent depression, the Chinese e-commerce sector is finding that there is an acute lack of adequate logistics space in the country. The increasing demand for warehousing is far outstripping the dwindling supply and subsequently prices for good logistics space is ever increasing. Estimates put China on course for being the largest e-commerce market by 2015 as domestic consumption continues to rise. The problems for Chinese internet companies is that there is no only a lack of logistics space, but there is limited infrastructure, ever decreasing amount of warehouse space and the shortage of package delivery expertise. These issues will continue to affect the ability of companies to successfully service consumers in the second tier Chinese cities and more remote areas. As the number of internet users continues to rise in China, 500 million currently which is expected to rise to 700 million by 2015, the lack for quality logistics spaces will hinder the growth of the e-commerce sector.
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Very interesting. I am not surprised that the Chinese e-commerce sector is going to suffer. It is a vast country that is growing in economic wealth, but lacks the infrastructure to supply goods to those who can afford them.
Why do you spend some much time talking about the Chinese economy? There are thousands of issues here in the US that concern manufacturing and logistics.
The Chinese economy will flatten off as there is a saturation – there are millions of rural communities that are not aware of the technological changes that have been occurring and are not able to be part of the economic growth. Until the infrastructure of the country improves, there will always be a limit to the growth of the Chinese nation.
Very interesting!! 200 million more internet users in 2 to 3 years. That is a rapidly expanding market.