E-commerce market to ignite logistics opportunities

China's booming e-commerce market is fuelling demand for logistics spaces in China, a market that is characterized by a severe shortage of modern logistics stock, real estate service provider DTZ said on Friday.

China is set to overtake the United States to become the world's largest e-commerce market by 2015, driven by swelling domestic consumption, a fragmented retail market and an expanding number of Web users, DTZ said.

By 2015, China will be home to more than 700 million Internet users compared to 500 million today, making it the biggest number of Web users in the world.

Related: China's e-commerce market 'faces logistical challenge'

For occupiers, the main challenge lies in the efficient delivery of goods to China's 220 million online shoppers. Limited infrastructure, lack of warehouse space, and a shortage of last-mile delivery expertise makes servicing lower-tier cities and inland areas difficult.

For investors and developers, scarcity of suitable land is also an ongoing issue. Investors should consider investing in large players with existing land banks, or redeveloping old facilities.

E-commerce transforms the supply chain from being supply-driven to demand-led. This has important ramifications for logistics property in terms of site selection, specification and location.

"We see growing need for the development of smaller warehouses located close to every city market," said David Ji, head of Greater China research at DTZ.