A report by Transport Intelligence, commissioned by the Goodman Group, says a lack of infrastructure and limited logistics in China are factors that aren’t keeping pace with e-retailing growth, while in developed regions geographic factors determine distribution strategies.
Logistics costs in China are in excess of 20 percent of GDP, more than double that in Europe, and outside of the major cities logistics offerings are almost non-existent, the report says. This has led to e-retailers developing a far wider network of facilities, aiming to get ‘closer to the customer’, it says.
In developed regions, where logistics infrastructure is relatively sophisticated, geographic factors determine the distribution strategies that e-retailers are adopting - ranging from overnight delivery from a single distribution point, to utilising multiple distribution points and duplicating main inventory lines.
“There is no ‘one size fits all’ approach to optimising distribution efficiency, with e-retailers in different markets adopting very different fulfillment and distribution strategies,” says Goodman CEO, Greg Goodman.
This has led to e-retailers developing their own fulfillment centres rather than relying on logistics operators, the report says, and dedicated purpose built facilities are increasingly demanded.
“The report’s findings confirm that there is strong demand for high quality, built-to-suit warehousing solutions amid the rapid growth in this sector,” Goodman says.
“The continued rapid growth in e-retailing is a real game changer for our business. We have undertaken a number of developments for the e-retailing sector over the last two to three years which is reflected across our portfolio, making it one of our largest customer groups,” Goodman says.
Goodman has delivered more than 581,000 sqm of new warehouse space across nine facilities for Amazon in Europe alone, with a further 225,000 sqm currently being developed across two projects in Germany. Goodman also recently announced the development of a new 42,410 sqm built-to-suit facility in Tianjin, China for Moonbasa, a major online retailer of ladies fashion and accessories.
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