For consumers, the bonded model provides buyer protection and shortens delivery times, while for customs it reduces the number of directly shipped packages that must be handled and, in theory, cuts the number of untaxed parcels entering the country, according to Alibaba.

“I am positive on the e-commerce trend but it is obviously more complicated than just supply and demand,” said Tammy Tang, executive director of industrial services in China for Colliers International.

“E-commerce is driven by demand and a continuous shift in spending behaviour. I don’t see the trend cooling down at all,” she said.

While data paints a rosy picture of China’s e-commerce industry, analysts highlighted the importance of infrastructure to support the surging online sales.

“No matter how advanced the online trade is, you always need offline support to fulfil the orders and deliver goods, be they clothes, takeaways or electronics,” said Ted Chan, partner and managing director of Boston Consulting Group.

He believes there is a need for better infrastructure to support customer service and offline support.

“Overall in China, the development of online platforms is better than that of offline support. So a lot of related firms are paying more attention to developing their offline infrastructure,” he said.

Chan added that warehouses are an important component of such infrastructure, especially now that the delivery volumes are much greater than before.

Colliers’ Tang agrees. “As distribution methodology continues to advance, we should be questioning what kind of distribution mechanism and warehousing are the most efficient and effective,” she said.

As such, delivery companies have become the strongest demand driver for prime warehouse space in China, accounting for more than 40 per cent of high-end non-bonded warehousing in the last quarter of 2016, according to A Jones Lang LaSalle (JLL) report.

“The real question is what kind of warehouse is needed to meet this needs,” said Tang. “When we talk about China’s warehousing, we always use GLP’s or Goodman’s grade A warehouse as a benchmark.”

Global Logistic Properties (GLP) is China’s largest prime warehouse developer, owning half of the country’s grade-A logistics space.

According to GLP’s 2016 annual report, 90 per cent of the company’s portfolio was occupied by businesses geared to domestic consumption, including retail and fast food, fast-moving consumer goods (FMCG), logistics services, electronics, and car parts.

E-commerce accounts for a rapidly increasing share of GLP’s China portfolio, rising from 3 per cent of leased space in 2009 to 26 per cent in 2016.

As an indicator of the need for an efficient distribution mechanism, mainland revenues of delivery companies, also known as “third-party logistics operators (3PLs)”, have soared as merchandise companies increase their spending on 3PL services.

The share of 3PL services as a proportion of logistics spending by consumer goods and e-commerce companies rose from 49 per cent in 2009 to 65 per cent in 2014, according to JLL.

Several major Chinese delivery companies, including Best Logistics, SF Express, ZTO, Yunda, and Deppon, have expressed interest in a share float to sustain their continued rapid growth.

“In future, delivery companies will become more capital-intensive with better management structure,” Chan said. “With more capital investment, such as Alibaba’s investment in the Cainiao logistics network, China is set to see big improvement in offline infrastructure.

“The optimal scenario is when goods only stop once at a warehouse, and are then immediately delivered to the customer.”