Overseas warehouses bring more business opportunities

An increasing number of Chinese foreign trade companies are building overseas warehouses, shortening the distance between goods and their target markets.

Guangdong Eagle Gifts Co., Ltd. based in Guangzhou, south China's Guangdong Province, has long been devoted to producing various kinds of ceramics, Christmas balls, decorative paintings, and other handicrafts.

Officers of Haizhu Customs under Guangzhou Customs learn about the development of overseas warehouses of Guangdong Eagle Gifts Co., Ltd. (Photo/Guo Yingyi)

Overseas warehouses have greatly helped the company's exports in recent years, said Li Xin'er, deputy general manager of the company's logistics center.

"As of May 28, the total value of goods distributed and sold through B2B cross-border e-commerce export to our overseas warehouses this year had reached 49.43 million yuan ($6.82 million), nearly triple that of the same period last year. We expect the growth in export value to continue expanding in the second half of the year," Li said.

The main target markets for the company's products are Europe and the U.S. Overseas warehouses enable the company to prepare goods in advance and customers to pick them up locally, while reducing logistics costs, Li noted.

Relying on its overseas warehouse business model, the company can enjoy preferential policies, such as priority in inspection, integrated customs clearance, and the convenient return of goods, from Haizhu Customs under Guangzhou Customs.

China has more than 120,000 cross-border e-commerce entities, over 1,000 cross-border e-commerce industrial parks, and over 2,500 overseas warehouses covering a total area of over 30 million square meters, said He Yadong, spokesperson for the Ministry of Commerce (MOFCOM). Among them are more than 1,800 overseas warehouses covering 22 million square meters for cross-border e-commerce trade.

Many logistics and trade service companies have also seized business opportunities brought by overseas warehouses to accelerate the construction of overseas warehouses.

Aside from China, Chinese courier company J&T Express' warehouse network had spanned 11 countries, including Malaysia, Thailand, Vietnam, Saudi Arabia, the United Arab Emirates, Egypt, and the U.S., as of May 2024, said Gao Junbo, an executive of J&T Express.

A worker operates at the Csepel Freeport Logistics Park of the Central European Trade and Logistics Cooperation Zone in Budapest, Hungary. The logistics park provides custom services, bonded warehouse and overseas warehouse service. (Xinhua/Zhang Fan)

The overseas warehouses of J&T Express have adopted automated equipment such as small automated production lines, packaging facilities, and forklifts to improve operational efficiency and service quality, Gao noted.

"In recent years, favorable policies for cross-border e-commerce overseas warehouses have helped Chinese companies better participate in international competition. We are also continuously improving the layout of our overseas warehouses and empowering our capacity to operate by building new overseas warehouses in countries like the Philippines and Mexico," Gao added.

Guo Tingting, vice-minister of commerce, said that the MOFCOM will support foreign trade companies and logistics companies in making good use of overseas warehouse resources, and make them smarter and more specialized on a larger scale, so that high-quality Chinese products can reach overseas consumers more conveniently.

According to Qichacha, a leading platform offering company information inquiry services, since the beginning of this year, 3,038 new companies related to cross-border e-commerce have been registered, an increase of 26.85 percent compared to the same period last year. The growth of cross-border e-commerce entities presents a broader stage for overseas warehouses.

No. Wang is a company that mainly exports Luosifen, a unique local snack in Liuzhou, south China's Guangxi Zhuang Autonomous Region and its derivative products. Since the beginning of this year, the company's export volume through cross-border e-commerce platforms has seen significant growth, and its export value has also increased compared to the same period last year.

Yao Hanlin, chairman of the company, said overseas warehouses have played a crucial role in its success.

"Thanks to overseas warehouses, we ensure that customers can receive their purchases in the shortest time possible," Yao noted.

By monitoring the inventory status in overseas warehouses in real time, the company can promptly replenish stocks, avoiding sales losses due to stock-outs. Overseas warehouses can also handle returns and exchanges, improving after-sales services and boosting customers' trust.

"Currently, we are planning to further increase investment to build more overseas warehouses, so that more overseas consumers can quickly enjoy high-quality Luosifen," Yao added.