Chinese logistics expert: Huge business potential for European companies in China

Posted: 17. October 2016-Likes: 0-Comments: 0-Categories: Ikke kategoriseret
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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.

Read more: DHL present 6 technology trends that will change the logistics business before 2030.

 

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.

Watch Dianjun Fang’s entire presentation at Nordic Delivery Conference 2016 here:

Facts

  • Dianjun Fang is Professor at Tongji University in Shanghai and Chief Representative of China at the German Fraunhofer Institute in logistics.
  • Dianjun Fang has been researching, educating and consulting within logistics and supply chain management for more than 30 years.
  • There are approx. 30 million drivers and 20 million trucks in China.
  • Chinese trucks can carry up to 20 vehicles at a time where European only are allowed to carry 8-10 vehicles.
  • China uses two pallet systems, which is problematic because they are different sizes: Europe pallet at 1 x 1.2 m and Japanese pallets at 1.1 x 1.1 m.
  • Dianjun Fang gave a presentation on China and its potential for European logistics companies at Nordic Delivery Conference 2016 in Copenhagen.
  • Nordic Delivery Conference is the year’s most inspirational delivery event for the e-commerce, transport, logistics and distribution and fulfilment industry. Read more about the conference

Text by: Consignor, news@consignor.com

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