The rapid expansion of the domestic logistics market on the mainland will spur the growth of mainland logistics companies, and their expansion will pose serious competition to the big global logistics players, analysts say.
'In 10 years or less, a Chinese company will emerge that will challenge the big logistics multinationals like DHL, UPS and FedEx, in the China market,' said the China partner of the financial advisory firm KPMG, Jeffrey Wong.
'Further down the road, the increased financial strength of some large Chinese logistics firms will help them go global and some may challenge the big logistics multinationals in global markets,' Wong said.
Until recently both mainland and foreign companies were focused on supporting mainland exporters, but both were now looking at the domestic logistics market. 'Now it's not just about moving goods from a factory to a port. It's more about moving goods across China.'
One indication of the rapid growth of the domestic logistics market was its e-commerce business, which nearly quadrupled from 130 billion yuan (HK$160 billion) in 2008 to 476 billion yuan in 2010, Wong said.
It was only in 2008 that delivery companies started collecting payment for goods delivered through e-commerce, thereby kicking off a fast-growing logistics business, KPMG said in a recent report. 'From almost nothing in 2008, e-commerce has grown to a point where China's biggest online business provider, the Alibaba Group, is planning to invest US$4.5 billion to set up its own logistics firm.'
In 2009 and 2010, international express deliveries from the mainland grew 40 per cent, but this was beaten by the growth of domestic express services, up 57 per cent, the report said.