Cross-border e-commerce logistics is poised to enter a period of industry-wide growth.

The pandemic has served as a catalyst for a qualitative shift in e‑commerce models, marking 2020 as the inaugural year of large-scale growth for cross‑border e‑commerce. Supported by this boom, cross‑border logistics has also come into the spotlight, emerging as a key focus today and poised for leapfrog development—potentially quadrupling in size over the next five years.

　　 Cross-border e-commerce is unlocking new potential.

　　Over the past decade, domestic e‑commerce has given rise to a cohort of leading express‑delivery companies; over the next five years, cross‑border e‑commerce is poised to follow a similar trajectory, nurturing another wave of Chinese cross‑border logistics giants with global influence.

　　It must be acknowledged that, since 2020, China’s cross-border e‑commerce exports have surged against the trend, driven by the COVID‑19 pandemic. As overseas consumers’ shopping habits increasingly shift online and as China’s policy framework provides strong support for cross‑border e‑commerce, the sector has entered a phase of large‑scale growth.

　　According to estimates, cross-border e‑commerce B2C export logistics revenue is expected to maintain a 30% annual growth rate over the next four years, with total revenues projected to exceed RMB 900 billion by 2024. The interplay between commercial flows and logistics is mutually reinforcing; as cross-border commerce experiences explosive growth, it will inevitably require corresponding cross-border logistics infrastructure to sustain that momentum. The transformation of product distribution channels will, in turn, drive a fundamental reshaping of the logistics landscape.

　　Judging by transaction volume and parcel throughput, cross-border e‑commerce has entered a growth phase characterized by economies of scale, with its scale now robust enough to underpin the rapid expansion and technological advancement of cross-border logistics.

　　For cross-border e‑commerce, in terms of market penetration, export penetration remains below 16%, while overseas online shopping penetration is under 20%, leaving substantial room for growth. From a trend perspective, the sector’s growth rate far outpaces both the average growth of the past five years and the overall expansion of foreign trade, making it a new driver of export growth. In quantitative terms, according to data from the Tianyancha app, in the first half of 2020 alone, the number of newly registered cross-border e‑commerce enterprises reached 2,356, reflecting an explosive expansion on the supply side. Developing countries are poised to become a key source of incremental growth in the cross-border e‑commerce market.

　　With the rapid growth of cross-border e‑commerce and the continuous expansion of both user base and market size, the cross-border logistics sector is demonstrating tremendous development potential. As a critical link in the cross-border e‑commerce value chain, cross-border logistics is poised to maintain a robust growth trajectory.

　　Cross-border logistics is undoubtedly at the cusp of a major opportunity, driven by the continued rise in e‑commerce penetration overseas. Within the cross‑border e‑commerce sector, B2C e‑commerce has grown rapidly; last year, its market size was approximately RMB 2 trillion. Assuming a B2C cross‑border logistics fee rate of 20%, the potential market for domestic logistics firms in this segment amounts to roughly RMB 200 billion. The sustained growth of e‑commerce penetration directly shapes the growth prospects of cross‑border logistics companies that are closely tied to it.

　　 Expand business and accelerate internationalization.

　　Over the past decade, the cross-border logistics market has been characterized by outdated operating models and extreme fragmentation, with domestic freight forwarders struggling to attract customers directly. The opportunities spurred by the explosive growth of cross-border e‑commerce have brought a glimmer of hope to China’s logistics sector. Cross-border logistics has become the focal point of intense competition among major logistics players, as leading domestic express delivery firms, traditional freight forwarders, and international logistics companies alike are making strategic moves into this space. As a result, the competitive landscape of the cross-border logistics industry is poised for transformation, entering a phase of scaled‑up growth.

　　How can companies break through the red‑ocean competition in China’s domestic logistics and express delivery market? Leading Chinese players such as SF Express, ZTO Express, and Cainiao have all turned their attention overseas, a trend that has been further accelerated by the rapid growth of cross‑border e‑commerce.

　　In October 2018, SF Express’s wholly owned subsidiary, SF Hong Kong, acquired DHL’s supply chain operations in mainland China, Hong Kong, and Macau for RMB 5.5 billion. One of the primary objectives of this acquisition was to expand internationally, leveraging DHL’s global operational expertise. Rather than a straightforward acquisition, it could be seen as paying DHL a “tuition fee” of RMB 5.5 billion—albeit an expensive one—in order to quickly gain the experience needed to master cross-border logistics.

　　In 2014, STO Express and ZTO Express respectively acquired U.S.-based YuSheng Express and Tianma Xunda. In June 2018, ZTO Express, together with Turkish Airlines and Pacific Airlines, announced the establishment of a joint venture to develop global air‑freight services. By adopting a relatively asset-light approach through joint ventures, these logistics giants can both rapidly expand into new business lines and further enhance their international footprint.

　　Over the past year, the competitive landscape of the cross-border logistics sector has shifted, with major express delivery players reshaping their strategies, expanding into overseas warehousing, and accelerating their internationalization. Driven by the growth of cross-border e‑commerce, we are witnessing a synergy between trade flows and logistics, which is giving rise to a cohort of Chinese cross-border logistics leaders with global influence—opportunities that none of the major express carriers are willing to pass up.

　　Cross-border e‑commerce places even higher demands on the timeliness of logistics services. The pressing challenges confronting multinational logistics providers are also the hurdles that Chinese logistics firms must overcome as they expand into cross-border operations, requiring a deep understanding of the policies and cultural nuances of different countries. At the same time, cross-border e‑commerce is increasingly demanding broader coverage and faster delivery times, creating opportunities for third-party logistics providers with efficiency advantages to accelerate their market penetration.

　　Thanks to the development of domestic cross-border logistics, the core profit‑generating segments of the entire supply chain have shifted from overseas logistics providers back to Chinese domestic firms, making the global expansion of China’s cross‑border logistics enterprises inevitable. This marks the arrival of an industry‑wide period of favorable growth for Chinese cross‑border logistics companies, as China transitions from a major exporting nation to a powerhouse in export logistics.

　 　Industry consolidation highlights competitiveness.

　　In fact, the relationship between logistics and commercial flows has always been mutually reinforcing, and logistics efficiency is a key safeguard for cross-border e‑commerce exports.

　　As demand in the cross-border e‑commerce logistics market grows rapidly, the industry’s key pain points are becoming increasingly apparent, primarily characterized by low market concentration. According to the 2021 China Cross-Border E‑Commerce Logistics Industry Blue Book, the combined revenue of the top 10 leading companies in 2020 totaled approximately RMB 41 billion, accounting for just 2% of the overall market. The B2C cross-border e‑commerce logistics sector is more complex than domestic express delivery and benefits from stronger economies of scale than traditional foreign‑trade logistics, underscoring the need for accelerated consolidation within the cross-border logistics industry.

　　Due to the fragmented nature of cross-border e‑commerce logistics and the limited capacity of Chinese logistics providers to build robust overseas service networks, six major pain points persist—cost, speed, customs clearance, tracking, loss, and returns—making cross-border logistics a particularly challenging area.

　　Currently, the B2C cross-border e‑commerce logistics market exhibits a level of prosperity and an industry competitive landscape similar to that of China’s domestic express delivery sector a decade ago. Back then, the burgeoning domestic e‑commerce market gave rise to powerful players such as SF Express and the “Tongda” network. We believe that, driven by the robust growth of e‑commerce logistics, the industry will shift from fragmentation toward consolidation, with leading firms increasingly asserting their advantages. Accordingly, we have good reason to expect that, over the next five years, a cohort of internationally influential logistics brands will emerge within the cross-border logistics space.

　　Cross-border logistics offerings have evolved from serving a single port city to covering all major ports and key international markets, and from offering a single logistics service to providing end-to-end solutions that span the entire spectrum of international logistics. Meanwhile, domestic e‑commerce logistics has built up robust capabilities in data analytics, operations, product development, and branding, thereby strengthening the foundation for cross-border e‑commerce logistics. Asset-heavy players are establishing overseas warehouses to attract industrial clusters and achieve economies of scale, while asset-light operators rely on customs clearance and freight‑forwarding networks to foster customer stickiness. Furthermore, a range of policies introduced by the Chinese government actively encourage Chinese cross-border logistics providers to expand their presence in overseas warehousing.

　　Accordingly, driven by the platform, sellers, and the government, overseas warehouses are poised for favorable growth in the years ahead.

　　Cross-border e‑commerce and logistics, built on 4G technology, represent an extension of China’s domestic e‑commerce and logistics sectors. Cross-border logistics is a service industry with a long, tightly interconnected supply chain, and an end-to-end digital platform serves as the “golden key” that will usher in the next era of cross-border logistics.

　　In short, robust growth in cross-border logistics is virtually assured. It is worth noting, however, that in the short term, companies will face challenges in digital transformation and direct‑customer development, while in the long term, they will encounter management hurdles related to globalization and post‑merger integration.

Source: China Water Transport News