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5 Trends to watch in China

By: Samantha Tham

China’s landscape is constantly evolving. Here are some of the key nascent trends in the Middle Kingdom and their implications.

1. China and new emerging markets

According to Mckinsey insights, China's urban population will hit the one billion mark by 2030.
The sheer size of China’s population promises substantial new markets and investment opportunities for companies in China and around the world. However, in addition to China, companies are also setting up production sites in other neighbouring emerging markets such as Thailand, Vietnam and Indonesia because of increasing labour costs. In most cases, reliable logistics service provider with several business sites in key areas is invaluable for businesses looking to use the ‘China Plus One’ strategy.  

2. China's middle class is on fire

China’s middle class is expected to be more than a third of the population by 2030.
By 2022, in addition to an increased number of higher-paying high-tech and service industry jobs, a cultural bias against excessive debt, and the explosive growth of e-commerce, the increase in consumption of China’s vast and growing middle class is higher and faster than before. To deal with surging demand, more efficient warehouses and delivery networks have been created.

3. Global technological dominance

China is well on the path of global technological dominance.
There are more than 549 million active users on leading Chinese app WeChat. Chinese e-commerce titan Alibaba, with 450 million Chinese shoppers on its platform, recorded more than USD$5.6 billion in profit in 2017. In addition, China recently announced its plans to be the world’s dominant player in artificial intelligence by 2030. The plan includes huge investments in AI research in several sectors, including agriculture, medicine and manufacturing. Logistics service providers must be able to anticipate and provide smart solutions in line with China’s AI-powered vision.

4. Rapidly growing e-commerce and tech-infused omnichannels

It is estimated that online shoppers in China will surpass 750 million by 2020.
Easy cashless transactions and improved delivery times - due to increasing investment in logistics and warehousing capabilities - has led to an increase in demand, making e-commerce a key driver of China’s strong growth potential. Additionally, tech-infused omnichannel strategies will continue to rise and expand in China, creating massive opportunities. An example is Alibaba’s Hema Supermarket expansion, where shoppers use the Hema app to scan and check out items

Data on the app is collected to build a more personalised shopping experience. Another example includes digital giant Alibaba taking Singles’ Day to $25 billion after it set up 1,000 smart pop-up stores outfitted with QR codes, smart speakers and other IoT devices to enable online purchases.
In other words, companies are now offering a seamless, real-time experience across their offline and online channels, and logistics service providers must offer reliable omnichannel solutions.

5. Pollution

Concerns over the impact of pollution and its social and economic costs have driven China to be the world’s largest investor in renewable energy, with massive investments in solar and wind-generated power.
Shanghai Electric, a subsidiary of one of China's top five power generators, is set to build a $3.9 billion concentrating solar power plant in Dubai in a partnership with Saudi Arabia. Major Chinese wind energy companies such as China Energy Investment Corporation, the world's largest wind energy developer, are also continuing to expand overseas. Relevant expertise in logistics concepts to support the solar and wind power sector is getting increasingly vital.

Samantha Tham, Marketing and Communications Manager (APAC) at Rhenus Logistics Asia Pacific, edited this article. To contact her about this or other articles, email blog@ap.rhenus.com

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