The new orders index rose to 55, which Ren Hehui deputy director of the CFLP said reflected a lively performance in both the up and down stream supply chains, and an improving real economy.

Domestic consumption and e-commerce have been major contributers to the growth in the logistics sector, while China’s import and export figures this year have been volatile.

Since 2014, China has been the largest e-commerce market in the world, both in terms of the volume of online sales, and the proportion of retail sales constituting online sales. That growth is still continuing.

The LaSalle report noted, however, that China’s modern logistics stock severely lagged behind its global counterparts, and was struggling to keep up with its expanding consumer market.

“China’s modern logistics stock per US$1 million of retail sales is only one-quarter of that of the US, and the gap is even more pronounced in terms of logistics stock per US$1 million of online retail sales,” the report said. “This significant demand-supply mismatch of logistics facilities represents an attractive opportunity for developing new stock.”

A number of international and domestic companies have responded to this.

“In mainland China we focus on developing logistics space in prime locations where overall supply still lags behind demand,” said Philip Pearce, managing director for greater China at Goodman Group.

With much of the growth in e-commerce being driven by Chinese middle-class spending, demand has tended to follow those consumers.

According to figures from real estate consultancy CBRE, approximately 40 per cent of the 8,87,000 square metres of new completions that were delivered to China’s logistics market in the first quarter of this year were located in Shanghai.

“Demand from automobile and components companies picked up in east China,” CBRE said in its report.

Pearce made a similar point about the drivers of logistics growth.

“So far, market fundamentals have been strong, with demand for logistics and industrial property space supported by domestic consumption growth and the rapid development of China’s e-commerce sector and retailers’ expansion,” he said.

Express delivery companies in China are continuing to expand rapidly due to the rapid growth of the logistics sector. SF Express said in a filing last month that it plans to list on the Shenzhen Stock Exchange via what is effectively a back-door listing. Two other courier firms, YTO Express and STO Express, are still awaiting regulatory approval, according to exchange filings.

One of the reasons why companies are seeking funding is to enable them to expand into overseas markets.

Speaking at the recent Beijing International Trade Service Fair, Xiang Feng, chief executive of YTS Express said that the company planned to expand into 18 countries, as part of which it would cooperate with local warehouses, local delivery companies and small businesses, according to Chinese state media.

China’s Commerce Minister Gao Hucheng said recently that logistics and e-commerce are among the service sectors that would be further opened up for overseas investment.

E-commerce is driving much of the logistics expansion in China, but not all players in the industry are using technology effectively when it comes to transporting goods. Research from strategy consultancy McKinsey found wide variations in logistics costs among e-commerce players, even among those using similar technologies and logistics strategies.

“While mobile, cloud and internet of things technologies are all well adopted and comparatively mature, the key question is finding innovative business models that will be acceptable to enterprises in the logistics industry,” said Mirek Dabrowski chief executive of transport management system oTMS.

More radical technological developments in China’s logistics industry have also drawn attention from investors.

“In 2014 and 2015, logistics technology saw massive capital inflows from venture capital and private equity firms,” Dabrowski said. “They were chasing the ‘Uber for cargo’ model, which had been assumed to be a high-growth model, and hoped to disintermediate [remove some intermediate players from the supply chain] and standardise, but, in practise, this failed to catch on.”