Chinese logistics expert: Huge business potential for European companies in China
E-commerce in China is growing rapidly and it is pushing the development of logistics and delivery services in the country. Professor Dianjun Fang from China gives a status of the Chinese logistics and delivery market and reveals what opportunities this provides for European companies to expand their business into China.
Development of efficient logistics and delivery in China does not follow the same pace as the country’s fast growing e-commerce. This makes a huge potential in China for European companies specializing in efficient and automated logistics processes according to Professor Dianjun Fang, who presented the possibilities of doing business in China at the Nordic Delivery Conference 2016.
“Logistics in China is at a very low level compared to Germany, which is one of the best countries in the world at logistics. And this is despite the fact that China has a good infrastructure, many drivers and vehicles as well as the Chinese government helping to fund many modern logistics parks. The problem is lack of IT systems to coordinate logistics and freight, both at warehouses and carriers, as well as lack of collaboration between the various logistics and freight companies. All this makes logistics in China costly and inefficient, i.e. trucks in China often drive with half-empty loads, and if a Chinese warehouse has an IT system, it rarely supports the warehouse processes, “says Professor Dianjun Fang, who is an expert in logistics and supply chain.
This represents a great potential in China for European companies specializing in streamlining warehouse, logistics and freight. The Chinese people’s openness towards new learning and technology helps to reinforce this potential, but there are challenges associated with entering the Chinese market.
Culture and business procedures are different in China
Although Chinese people are open to new methods and technologies, European companies need to understand Chinese culture and business procedures.
“Chinese people are not good at planning and thinking in processes, but are more concerned with owning the newest or best marketed technology. It is therefore important that you as a European company convince the Chinese company about the importance of analyzing their processes, before they choose which technology to support their existing warehouse, logistics and delivery processes, ” Dianjun Fang advises.
Chinese people are generally hard working and eager to learn new things. Therefore, it is an advantage if European companies can offer education and training in China. However, European companies are definitely best of by establishing a branch in China with local people.
Read more: how Consignor established their software company in China here.
“The culture and business procedures are completely different in China, i.e. it is virtually impossible to do business in China without personal Chinese connections within your industry. Which is why I believe that European companies gain larger market shares by establishing local branches in China, ” Dianjun Fang concludes.