FedEx Opens New Facility in Shanghai to Keep up with E-Commerce Boom

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Across the globe, the e-commerce market continues to boom. Driven by a steady stream of technological advancements and an optimistic economy more and more online shopping is taking place every single day. To keep up with demand FedEx is building a major new facility in Shanghai.

The sustained growth of e-commerce might be a worldwide phenomenon, but China is the country at the heart of the trend. For many years it was all about the good coming out of China to satisfy the desire for cheap consumer products globally but now China’s long-term planning is paying off, and more and more goods are flowing into China. Chinese consumers are more wealthy and worldly than ever before, and the role their country has played in developing the worldwide online economy has positioned them on the cutting edge of the field.

China’s almost miraculous economic growth means that they have in effect leapfrogged many other countries, especially when compared to the slow and steady historical growth experienced by many countries over the past hundred years. Globalization means that Chinese have been exposed to the growth of e-commerce from day one and so they’ve always had their sights aimed at a world of digital convenience.

This outlook, combined with a booming economy, is driving the construction of FedEx’s new facility. In 2018 the value of goods sold online and moving across the Chinese border is expected to grow by more than 40 percent, reaching a total value of almost $120 billion. While Chinese businesses continue to handle much of the shipping inside of the country, it’s international firms like FedEx and UPS that handle cross-border shipping.

The new facility being built by UPS is going to be 134,000 square meters of space that will be dedicated to helping Chinese consumers satisfy their new appetite for foreign goods. The facility is budgeted at $100 million, which adds up to approximately $1000 a meter. This number shows that even though China’s economy is exploding in size the cost of building a major hub in one of the country’s most pricey cities is still very reasonable compared to operating in a city of comparable importance located in Europe or America.

There is still plenty of room for growth in the Chinese economy, and more and more businesses are doing all that they can to capture their piece of the pie. But as China shifts from a production economy to a consumption economy it’s worth remembering that local businesses are going to end up with the largest pieces even as they continue to expand their reach globally.

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