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E-commerce boosts development of Pearl River Delta logistics facilities

THE fast-growing e-commerce business in China has unveiled vast opportunities for logistics parks in the Pearl River Delta while exposing logistics property developers to problems of how to attract suppliers and buyers while suffering from a shortage of support facilities.

Experts suggest that these logistics parks should try to attract large e-commerce companies and upgrade their facilities to provide quality service, Xinhua reports.

The latest report from real estate giant Jones Lang LaSalle pointed out that the existing warehouse capacity is not able to meet the surging demand from e-commerce industry.

According to the report, logistics parks in the Yangtze River Delta and Pearl River Delta are different. In the Yangtze River Delta and Bohai Economic Rim region, there are well-developed logistics parks that offer comprehensive services for the e-commerce industry.

But in the Pearl River Delta, industrial parks and logistics parks are separated and offer different services. The latter only provides warehouses for the e-commerce companies.

Zhang Ning, head of industrial property for Jones Lang LaSalle in Guangzhou, said that the logistics property developers in Pearl River Delta are facing three main challenges they must overcome if they want to share the benefits of China's fast growing e-commerce sector.

The first is to seek supporting policies from the government on logistics use of land. The second is to attract enterprises from both ends of the supply chain to build their facilities in these logistics parks. The third is to upgrade the supporting facilities and services of parks and seek to enhance convenience of access to public transport.

Pearl River Delta has a foundation in traditional industries. Many well-known domestic brands of house appliances and fashion are from the region. Mr Zhang noted that though the e-commerce logistics facilities in the region are still at the start-up stage, there is great potential.

Mr Zhang suggested that these logistics parks should attract large players in the e-commerce industry and smaller local firms into these parks to create influence and encourage local firms to build up marketing centre or regional distribution hub inside these parks. He also suggested development of supporting services such as in financing and personnel.