The current cold chain logistics market in China presents a paradoxical situation: it’s both “cold” and “hot.”
On one hand, many industry players describe the market as “cold,” with underutilized cold storage facilities and some well-established companies going out of business. On the other hand, the market continues to grow, with leading companies reporting strong performance. For example, Vanke Logistics achieved a 33.9% increase in cold chain revenue in 2023, maintaining over 30% growth for three consecutive years—well above the industry average.
1. The Growing Trend of B2B and B2C Integration in Cold Chain Logistics
The seemingly contradictory state of the cold chain industry stems from a structural mismatch between supply and demand.
From a supply perspective, the market is oversaturated, with cold storage and refrigerated truck capacity outpacing demand. However, the evolution of retail channels has led to a shift in demand. The rise of e-commerce and omnichannel retailing is driving the need for logistics systems that can serve both B2B and B2C customers from a single regional warehouse.
Previously, B2B and B2C operations were handled by separate logistics systems. Now, businesses are increasingly merging these channels to simplify management and reduce costs. This shift has increased the demand for logistics providers capable of handling diverse requirements.
Companies like Vanke Logistics have responded by launching products such as BBC (Business-to-Business-to-Consumer) and UWD (Unified Warehouse and Distribution). The BBC model provides integrated warehouse and distribution services for industries like food, beverages, and retail, offering next-day or two-day delivery. Meanwhile, UWD consolidates small orders into efficient deliveries, addressing the need for high-frequency, low-volume shipments.
2. The Future Cold Chain Giants
While the “cold” reflects the challenges faced by smaller players, the “hot” signifies the sector’s strong growth potential.
China’s cold chain logistics market has grown from ¥280 billion in 2018 to approximately ¥560 billion in 2023, with a compound annual growth rate (CAGR) exceeding 15%. During the same period, cold storage capacity increased from 130 million cubic meters to 240 million cubic meters, and the number of refrigerated trucks rose from 180,000 to 460,000.
However, the market remains fragmented compared to developed economies. In 2022, the top 100 cold chain companies in China accounted for only 14.18% of the market, whereas the top five companies in the U.S. control 63.4% of the cold storage market. This suggests that consolidation is inevitable, and industry leaders are already emerging.
For instance, Vanke Logistics recently signed a strategic partnership with SF Express to deepen collaboration in cold chain logistics, signaling the industry’s move toward greater integration.
To succeed in the cold chain industry, companies need to achieve high order density to maximize resource utilization and ensure stable service quality. Vanke Logistics, with its dual capabilities in warehousing and supply chain management, is well-positioned to lead. Its extensive network includes over 170 logistics parks in 47 cities, with more than 50 dedicated cold chain facilities. In 2023, the company launched seven new cold chain projects, adding 1.5 million square meters of rentable space with a utilization rate of 77%.
3. A Path Toward Leadership
Vanke Logistics aims to emulate Huawei’s model of continuous innovation and effective management. According to Chairman Zhang Xu, the company is undergoing a significant transformation, adopting a business model centered on standardized, scalable products and an optimized sales process.
The future giants of cold chain logistics will be those that combine core resources with integrated service capabilities. As Vanke Logistics accelerates its transformation, it is clear that it is already ahead in the race toward industry consolidation.
Post time: Nov-18-2024