Chinese logistics and e-commerce companies are taking up space in prime warehouse real estate across the US lately.
This is seen as a strategic move by the e-commerce giants to get closer to the American consumer. Warehouses in key logistics hubs like Southern California, New Jersey, and Georgia are where they are looking to settle, according to media reports.
Earlier this year, reports surfaced that Amazon was allegedly planning to launch its bargain section, aiming to challenge China’s fast-fashion online shopping groups Temu and Shein.
According to leaked information, Amazon was planning to ship items directly to overseas consumers from Chinese sellers.
The Wall Street Journal has revealed sources in the real estate industry who have noticed a significant increase in warehouses being taken up by Chinese e-commerce firms.
Chinese third-party logistics and e-commerce firms accounted for 20% of new US warehouse leases through Q3 2024.
Why are Chinese e-commerce firms setting up shop in US?
Shein and Temu have been at the receiving end of America’s crackdown on cheap Chinese goods.
Setting up warehouses in the US allows these companies to be closer to the American consumer base. It speeds up delivery times and reduces costs associated with international shipping.
This could be more appealing to US customers who are expecting faster and inexpensive deliveries.
US and China’s trade war
The US and China’s economic conflict has been raging for a few years (since 2018) since US president Donald Trump implemented tariffs and other trade barriers on China.
This week, Trump was elected to serve the country until 2028. There is uncertainty about what this might mean for Chinese businesses and cross-border trade in America.
With more Chinese companies entering the US market, retail giants like Amazon and Walmart might face intense competition.
Amazon is gearing up to counter Shein and Temu’s affordability. However, the competition might ultimately push players to improve delivery speed and pricing strategies in the future.
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
