China’s e-commerce giants make the news each year with their deals on November 11, “Single’s Day,” and June 18. This year, Amazon is will be joining the competition with Prime Day.
Amazon Prime members can receive free delivery on overseas purchases. Chinese Prime Subscribers can purchase overseas commodities and have them shipped directly from Amazon’s foreign fulfillment centers to China. The e-commerce giant is preparing its worldwide warehouses to begin moving goods into China.
“International orders placed on Prime Day will take five to nine days to arrive in any of 82 Chinese cities,” said Xue Xiaolin, president of Amazon logistics in China.
Before Prime Day, Amazon told a reporter for Jiemian News about its logistics support. The company has more than 140 fulfillment centers around the world, and the 99 largest support foreign orders. The company also has 25 smart fulfillment centers where more than 80,000 Kiva robots work to accelerate package sorting and transportation. In the US, the company’s Prime Air drone fleet and regular flights ensure delivery. The company also said it has expanded its airline capacity on flights from Europe, America and Japan to China.
Jiemian News visited Amazon’s fulfillment center in Kunshan, Jiangsu province. The facility is used for storing, sorting and delivering items, and it has eight outgoing shipments each day.
Workers sort items in accordance with a route set by the system. Amazon’s intelligent transmission system sends items to shipping area where they are selected and packaged. The system recommends packing orders based on each item’s size and weight. The integrated Slam system weighs, tags and scans the packaged items as soon as they pass. Its high precision detects any package that was incorrect packed. China has more than a dozen such fulfillment centers. The centers in Beijing, Tianjin, Shanghai and Guangzhou have direct customs clearance. After the fulfillment center sorts the items, Amazon’s distribution stations deliver them to customers.
Amazon provides “same-day delivery” and “two-day shipping” services. In the supply chain, Amazon’s partners are responsible for the arterial transportation and items’ transfer between warehouses. The last kilometer of delivery relies on “self-established Zhuoyue Delivery plus third party partnership,” the Amazon center’s director said. All couriers delivering packages for Amazon in Shanghai are Amazon employees.
As the cross-border e-commerce booms and China’s domestic e-commerce giants compete fiercely, Amazon has made overseas purchases a featured project since the company’s edge lies in its global infrastructure. In 2014, Amazon began offering direct shipment from the US, Europe and Japan to China. In 2015, Amazon allowed consumers to buy items from multiple countries’ warehouses in one order.
According to iiMedia Research Group’s “Research Report of China’s Cross-border E-commerce Market of 2017,” third-party data mining shows the international e-commerce market is worth 6.3 trillion yuan, and that it is increasing 23.5 percent per year. The report forecast the market would expand to 8.8 trillion by 2018.
Logistics is a common hindrance for Chinese customers who want to make overseas purchases. IResearch, another research company, released a survey that found 29.9 percent of respondents gave up and overseas purchase due to high transportation costs – another 20.1 gave up because of delivery delays.
International logistics has become a new focus for many big companies. In May, UPS and SF Express announced a joint venture in Hong Kong to promote and develop international express products and expand international logistics. In the same month, Yunatong Express acquired Hong Kong’s listed company Onitme-Express and announced plans for international logistics. Last December, Shentong Express opened up Sino-Europe airline logistics.
Compared with Amazon, today’s logistics companies rely more on the third-party partners abroad, especially rented warehouses or local logistics agents. Yuantong, Zhongtong, Shentong, and Yunda Express all adopt the model of partnering with overseas businesses or forming joint ventures. EMS has its own network overseas, but SF Express tapped into international logistics before most of its domestic rivals with the e-commerce platform Fengqu Hai Tao. SF Express runs the logistics on its own, aided by partnerships with foreign businesses.
This story originally appeared in Jiemian and was translated by Pandaily.
Click here to read the original Chinese article.