More Chinese Sellers Rely on Strategically Placed Warehouses

The practice of spreading merchandise around strategically placed warehouses closer to one’s usual customer base has recently become more commonplace for Chinese B2C sellers shipping outside of their home country. In 2020, so-called forward-location warehouses were used for 40 percent of the outbound B2C logistics market. The method cuts delivery time drastically, especially considering large share of outbound B2C shipments from China travel quite far. 37 percent of parcel volumes is headed for the United States, while a combined 18 percent travel to the UK, France and Germany.

In 2015, forward-location warehousing was used for only 30 percent of the logistics market. The same year, pricy express shipping was still used in 28 percent of the logistics market. Due to the success of warehousing and other methods, that was cut down to just 14 percent in 2020.

Another trend that is speeding up delivery times while cutting costs is the direct line model, in which orders of more seasonal or trend-based items are (air-)freighted in bulk to the U.S. and Europe, before being handed over to local delivery services for last-mile fulfillment. Hugely popular Chinese apparel retailer Shein, which churns out hip clothing that is produced in smaller batches and marketed to targeted audiences overseas, is a user of this model, according to McKinsey and Company. Postal delivery from the Chinese seller directly to the overseas buyer is also losing significance as a result.