China’s Logistics Prosperity Index Climbed Last Month as New Retail Continues to Take Shape

China’s Logistics Prosperity Index Climbed Last Month as New Retail Continues to Take Shape

Dou Shicong

Date: Tue, 06/05/2018 - 12:01 / source:Yicai
China’s Logistics Prosperity Index Climbed Last Month as New Retail Continues to Take Shape
China’s Logistics Prosperity Index Climbed Last Month as New Retail Continues to Take Shape

(Yicai Global) June 5 -- China’s logistics prosperity index climbed 1.5 points on the month to a year-to-date high of 56.1 in May, suggesting continued development of the sector as it becomes ever more prominent in the burgeoning New Retail sector.

The new order index also climbed 1.6 points to 54.5 and the inventory turnover index rose 0.6 point to 52, according to data published yesterday by the China Federation of Logistics and Purchasing. The average inventory index fell 5.7 points to 48.9, meaning products are shifting faster than before.

China’s logistics sector is on the rise and orders are constantly increasing, said He Hui, deputy director at the China Logistics Information Center. Food and agricultural by-products are proving particularly popular, and costs are falling as more players enter the market, he added, saying investment in logistics-related fixed assets is also growing.

Logistics plays a major role in the emerging New Retail strategy taking China by storm. The model links online and offline sales with deep distribution networks and has been widely adopted by some of the country’s biggest tech firms, including Alibaba and Tencent.

Hangzhou-based Alibaba led a group of investors in a USD1.4-billion deal to take a 10-percent stake in courier ZTO Express last week, looking to reinforce its logistics network a month after rival JD.Com bought a 10-percent stake in warehouse partner China Logistics Property Holdings for USD115 million.

The logistics prosperity index covers five main aspects: total business volume, new orders, number of operators, inventory turnover and equipment utilization. A value over 50 indicates expansion while a figure below 50 indicates contraction.

Editor: James Boynton

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Keywords: China Federation of Logistics & Purchasing, Logistics Prosperity Index, new retail