Courier firms expanding overseas

Globalized perspective

In addition to traditional courier companies, online retailers' logistics affiliates are also expanding globally. JD Logistics, the logistics arm of Chinese e-commerce giant JD, has invested heavily in establishing overseas warehouses and a delivery network. It has established more than 110 overseas warehouses in the past three years.

JD Logistics said it plans to build a transregional aviation logistics network, operate more than 20 self-run overseas warehouses and include more than 100 economies involved in the Belt and Road Initiative, with its business-to-business logistics network covering more than 300 cities, all within the next five years.

"In the future, we will export technology and solutions to more countries," said Wang Zhenhui, CEO of JD Logistics.

JD launched its Indonesia business in 2015. So far, it has established four warehouses in the country, with its delivery service covering seven islands, 483 cities and 6,500 counties, with 85 percent of the orders delivered in just one day.

According to the company, it aims to improve the circulation of commodities across Indonesia's many islands via drones later this year.

Its updated logistics system in Thailand will come into operation this month.

"We will step up efforts to export our supply chain services to the global market over the next 10 years," said Liu Qiangdong, chairman and CEO of JD, in an internal letter.

"In the past two years, we have begun our expansion in Southeast Asia, and will continue to expand our presence in Europe and the United States in cooperation with US tech giant Google," Liu said.

In June, JD and Google announced the latter will invest $550 million in cash in the Chinese e-commerce company. The partners will work together on a range of strategic initiatives, including the joint development of retail solutions in a number of regions around the world, including Southeast Asia, the United States and Europe.

"Chinese delivery companies' international push is still at an early stage. There are more opportunities to be tapped and the industry will become more regulated in the future," said Yun Mian, vice-chairman of the China Society of Logistics.

Liu Dacheng, deputy director of the internet industry research institute of Tsinghua University, said leading Chinese courier companies already have a globalization vision, but they still face many challenges, as transportation and labor costs are relatively high in overseas markets.

"Once the express delivery companies enter foreign countries, they should change their overall operation model. For instance, the demographic dividend represented by the cheap deliverymen in China will disappear, so logistics service providers face higher labor costs," Liu said.

Also, most overseas consumers live in suburbs and relatively scattered areas, so reducing delivery costs will become another challenge, according to Liu.