Executive Briefings

China's E-Commerce Growth Reportedly Hampered by Fulfillment, Logistics Bottlenecks

China's e-commerce market continues to skyrocket with estimates of 2012 B2C sales likely to top $107bn. However, this growth has placed pressure on the logistics infrastructure resulting in delivery issues. Not only is delivery a problem, but according to 360Buy, one of the largest Chinese e-commerce providers, "E-commerce is developing quickly but fulfillment and logistics are the key bottlenecks."

As such, a particular emphasis on fulfillment and logistics to satisfy this e-commerce demand is under way. Not only are express providers such as SF Express, YTO and STO providing targeted warehousing e-commerce solutions, but e-commerce providers such as Alibaba, 360Buy and Vancl, are creating their own logistics divisions.

Besides warehousing, delivery still remains problematic. The fragmented domestic express market is highly competitive and to achieve a profit is difficult for these providers. However, most e-commerce retailers tend to rely on the top ten largest Chinese domestic express providers, which has resulted in a pricing war among these providers. Still, as logistics competition from e-commerce providers increases, the need to differentiate and make a profit in this market is necessary.

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As such, a particular emphasis on fulfillment and logistics to satisfy this e-commerce demand is under way. Not only are express providers such as SF Express, YTO and STO providing targeted warehousing e-commerce solutions, but e-commerce providers such as Alibaba, 360Buy and Vancl, are creating their own logistics divisions.

Besides warehousing, delivery still remains problematic. The fragmented domestic express market is highly competitive and to achieve a profit is difficult for these providers. However, most e-commerce retailers tend to rely on the top ten largest Chinese domestic express providers, which has resulted in a pricing war among these providers. Still, as logistics competition from e-commerce providers increases, the need to differentiate and make a profit in this market is necessary.

Read Full Article