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Booming Trade in China Impel the Need for Efficient and Cost-Effective Operations Through 3PL

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Booming Trade in China Impel the Need for Efficient and Cost-Effective Operations Through 3PL

Mumbai, Maharashtra, India

China's expanding retail industry including apparel and fashion, food and grocery, furniture retailing, and home electrical appliance is increasingly seeking to outsource its logistics functions to third-party logistics (3PL) service providers to meet the growing need for a variety of higher quality products. Increase in foreign investments also drives demand in the 3PL markets.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), Strategic Analysis of 3PL Markets in the Chinese Retail Sector reveals that the market earned revenues $2.18 billion in 2005, and estimates this to reach $11.51 billion in 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the 3PL Markets in the Chinese Retail Sector, send an e-mail to Ravinder Kaur, Corporate Communications, at ravinder.kaur@frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.

The accession of the World Trade Organization (WTO) in 2001 has led to a marked increase in foreign investments, since the restrictions to operate in the logistics industry have been disappearing. Foreign enterprises can now operate as wholly owned subsidiaries, and operate in services such as transport, warehousing, freight forwarding, and others.

"Apart from the increasing penetration of multinationals, the 3PL activity is gaining momentum also due to the need for integrated logistics solution offering, competitive advantage through leaner supply chains, opening more toward outsourcing to focus on core competencies, and benefit from cost savings," observes Frost & Sullivan Research Analyst Aarthi Nandakumar. "As retailers are beginning to realize these benefits, significant growth of 3PL markets is imminent."

By efficiently tackling the challenges of skilled manpower and geographical diversity, 3PL service providers can emerge successful in the Chinese retail sector. Developing strategic partnerships with retailers can help them to capitalize the fully liberalized and open market.

Domestic 3PL service providers can use their understanding of the needs and demands of the local people to their advantage to increase their market share.

"However, the highly diversified geographic needs of the country pose a challenge for service providers," cites Nandakumar. "As the demands of the retail sector vary from region to region, it is crucial that service providers are familiar with the local jurisdictions, which vary with provinces so that the uniformity is maintained in their service offerings."

The retail sector is more prominent in the eastern and southern parts of China, which has consequently led to proliferation of more service providers in that region. These regions already have in place robust road and rail network, while central and western parts are currently witnessing infrastructure improvements to ensure an operating environment that is conducive for logistics service providers.

Government incentives to develop infrastructure are essentially encouraging 3PL service providers. More than 80.0 percent of the investment is directed toward transportation to develop a more integrated network of highways, railways, airports, and ports. Plans for logistics parks and distribution centers offering services such as freight management, warehousing, and inter-modal services are underway.

3PL service providers will have to accurately assess the specific geographic needs and expansion plans, and offer services accordingly to meet the requirements of China's geographic diversity. It is important for service providers to grow in tandem with the continually developing retail sector to emerge as successful 3PL participants in the Chinese retail sector.

The Strategic Analysis of 3PL Markets in the Chinese Retail Sector is part of the Transportation subscription, which also includes research services in the following markets: strategic analysis of the ASEAN-3 3PL markets, strategic analysis of 3PL markets in the Indian retail sector, strategic analysis of 3PL markets in India and also specifically in the Indian FMCG sector. All research services included in subscriptions provide detailed market opportunities and industry trends, evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership service, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective, and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.

Strategic Analysis of 3PL Markets in the Chinese Retail Sector
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Ravinder Kaur, Corporate Communications - South Asia & Middle East, Frost & Sullivan, +91 (044) 4204 4515 ravinder.kaur@frost.com

Vanessa Quezada, Corporate Communications - North America, Frost & Sullivan, +1 210 477 8427 vanessa.quezada@frost.com

Source: Frost & Sullivan (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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