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©2014 Aranca. All Rights Reserved. www.aranca.com If you wish to reproduce or use this infographic in any format, please email us at [email protected] Compiled by: Mayur Varandani China’s logistics market : Moving north China’s logistics market is estimated to grow at around 10% year-on-year (yoy) and reach around 195 trillion Yuan in 2013, primarily driven by improved services, growing industrialization, expanding domestic retail market and continued government support Good time for growth… Recent expansion activities by foreign and local players, and continued government support toward improvement of logistics services has further driven the growth of logistics industry in the country. The manufacturing sector remains key to China’s economic development. The logistics value of industrial products is estimated to account ~91.4% share of the total value in 2013. Estimated CAGR of China’s total logistics value 2008–13E (Tn Yuan) 16.7% Estimated share of transportation cost in the total logistics value (2013) China logistics prosperity index, LPI (April–December, 2013)* KEY CHALLENGES 51.3% 2008 2009 2010 2011 2012 2013E 2008 2009 2010 2011 2012 2013E 97 125 158 177 195 90 Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis Note: An LPI reading above 50 indicates overall expansion in the logistics sector; below 50 indicates overall contraction. Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis 12.7% 34.7% 52.6% 55.3% 53.5% 53.0% 52.1% 51.3% 32.9% 33.8% 35.0% 35.1% 36.2% 11.8% 12.7% 12.0% 12.8% 12.5% Transportation Cost Inventory Cost Management Cost Quarter 2013 LPI April ‘13 54.8 July ’13 52.4 Oct ’13 53.6 Dec ‘13 52.4 Infrastructure development projects are largely undertaken in coastal areas. Inland areas still lag the appropriate infrastructure. Warehouses in China are relatively sub-standard and do not meet the international standards. Also, poor warehouse layout design and insufficient material handling equipment have affected the efficiency of operations. High toll fees imposed by the government for recovering construction costs of roads and bridges has further affected the industry’s growth. Although there is an increasing number of graduates in logistics and transport, the supply of skilled labor still remains a key challenge for the industry. A fragmented market China’s logistics market is fragmented with a large number of logistics enterprises. Road transport enterprises account for the largest share of the logistics market, in terms of the number of enterprises (790,000 during 2011–12). A long way to go… Although China’s economic growth has been driven by increasing demand for logistics services, the country’s logistics capabilities still remain at an early stage of development when compared to other developed economies like the US and the European Union. !

China Logistics Market: Moving North | An Aranca Infographic

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China's logistics industry expanded around 10% year-on-year (yoy) and reach around 195 trillion Yuan in 2013. China's logistics market is fragmented with a large number of logistics enterprise. Expansion activities by foreign, local and continued government support has driven the growth of the Chinese logistics market.

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Page 1: China Logistics Market: Moving North | An Aranca Infographic

©2014 Aranca. All Rights Reserved. www.aranca.comIf you wish to reproduce or use this infographic in any format, please email us at [email protected]

Compiled by: Mayur Varandani

China’s logistics market : Moving northChina’s logistics market is estimated to grow at around 10% year-on-year (yoy) and reach around 195 trillion Yuan in 2013, primarily driven by improved services, growing industrialization, expanding domestic retail market and continued government support

Good time for growth…Recent expansion activities by foreign and local players, and continued government support toward improvement of logistics services has further driven the growth of logistics industry in the country.

The manufacturing sector remains key to China’s economic development. The logistics value of industrial products is estimated to account ~91.4% share of the total value in 2013.

Estimated CAGR of China’s total logistics value 2008–13E (Tn Yuan)16.7%

Estimated share of transportation cost in the total logistics value (2013)

China logistics prosperity index, LPI (April–December, 2013)*

KEY CHALLENGES

51.3%

2008 2009 2010 2011 2012 2013E

2008 2009 2010 2011 2012 2013E

97

125

158

177

195

90

Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis

Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis

Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis

Note: An LPI reading above 50 indicates overall expansion in the logistics sector; below 50 indicates overall contraction.Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis

12.7%

34.7%

52.6% 55.3% 53.5% 53.0% 52.1% 51.3%

32.9% 33.8% 35.0% 35.1% 36.2%

11.8% 12.7% 12.0% 12.8% 12.5%

Transportation Cost Inventory Cost Management Cost

Quarter 2013

LPI

April ‘13

54.8

July ’13

52.4

Oct ’13

53.6

Dec ‘13

52.4

Infrastructure development projects are largely undertaken in coastal areas. Inland areas still lag the appropriate infrastructure.

Warehouses in China are relatively sub-standard and do not meet the international standards. Also, poor warehouse layout design and insu�cient material handling equipment have a�ected the e�ciency of operations.

High toll fees imposed by the government for recovering construction costs of roads and bridges has further a�ected the industry’s growth.

Although there is an increasing number of graduates in logistics and transport, the supply of skilled labor still remains a key challenge for the industry.

A fragmented marketChina’s logistics market is fragmented with a large number of logistics enterprises. Road transport enterprises account for the largest share of the logistics market, in terms of the number of enterprises (790,000 during 2011–12).

A long way to go…Although China’s economic growth has been driven by increasing demand for logistics services, the country’s logistics capabilities still remain at an early stage of development when compared to other developed economies like the US and the European Union.

!