Various large warehouses run by Chinese enterprises have been built close to the border with Vietnam to reduce the time and cost to deliver goods ordered online to Vietnam.

Many Chinese enterprises have even invested heavily in warehousing and sorting centers in Vietnam.

With these systematic storage and sorting facilities, goods ordered online from China can be delivered to customers in Hanoi within one to two days and those in Ho Chi Minh City in three to five days.

Warehouses close to border with Vietnam

Along the streets surrounding the Pingxiang Border Gate in China, which borders Vietnam’s Lang Son Province, Tuoi Tre (Youth) newspaper reporters found that multiple container trucks traveled to and from large warehouses to carry goods to the nearby border gate.

Some empty container trucks from Vietnam also headed toward warehouses in China.

The reporters were shocked at modern and high buildings used to store goods for export to Vietnam at the China-ASEAN cross-border e-commerce logistics park, which carries a price tag of some VND13.1 trillion (US$518.7 million) and covers 128 hectares of land, close to Lao Cai Province in northern Vietnam.

The park includes logistics and good clearance centers and is located only 295 kilometers from Hanoi.

A Chinese man working in the park shared that as warehouses are near the border, Vietnamese can soon receive commodities ordered through live streams on e-commerce platforms.

In Hekou, Pingxiang, and Dongxing, which border the northern Vietnamese provinces of Lao Cai, Lang Son, and Quang Ninh, a series of huge warehouses have been erected three to four kilometers from the border with Vietnam.

These storage facilities have helped product sellers and e-commerce platforms shorten the goods delivery time and reduce costs.

Many enterprises have built warehouses in the border area to serve their operations. Those from Guangzhou have also rushed to Dongxing to lease or build storage centers to facilitate the transport of their merchandise to Vietnam.

Developing warehouses, sorting centers in Vietnam

In addition to warehouses in the border area, plenty of Chinese logistics and e-commerce firms have poured capital into warehousing in Vietnam.

As a case in point, Best Inc., a transport giant from China, has channeled $50 million into warehouses in Vietnam in the five years it has been operating in the country.

Besides an automatic goods sorting center in Ho Chi Minh City’s outlying district of Cu Chi, the group put into operation its largest-ever goods sorting center in Southeast Asia in Vietnam-Singapore Industrial Park in northern Bac Ninh Province in late 2021.

As of mid-2024, the group owned warehouses spanning 100,000 square meters, 36 goods sorting centers, and over 700 post offices with 7,500 couriers.

A representative of a Chinese logistics group said he had studied the Vietnamese market and predicted that the logistics sector in Vietnam would be bustling in the next decade.

The group has inked contracts to lease warehouses and open smart storage facilities in both northern and southern Vietnam, he added.

The company will open dozens of smart warehouses in Vietnam and has cooperated with Vietnamese warehouse owners to jointly operate them in a bid to optimize costs and improve productivity.

A representative from the e-commerce platform Shopee told Tuoi Tre that the platform has established an optimized logistics system with warehouses in Ho Chi Minh City and Bac Ninh Province in northern Vietnam.

These storage facilities are designed to meet the demands of transport partners around the clock, enabling Shopee to reach and serve more clients across various regions.

To further accelerate delivery times, Shopee collaborates with major transport companies that have professional sorting centers and a comprehensive warehousing and shipment system, the representative added.

According to logistics companies, warehouses are crucial in the competition to reduce delivery times and product prices, which also influences Vietnamese shoppers' preference for Chinese e-commerce platforms.

The director of cross-border trade at a Chinese logistics firm which is a partner of Shopee, Lazada, and TikTok Shop, told Tuoi Tre that Chinese traders and e-commerce platforms often lease warehouses in border areas or in Vietnam.

L., a KOC selling products on TikTok Shop and Shopee in Vietnam, revealed that it took her one to two months to prepare for a live stream.

KOC stands for Key Opinion Consumer, referring to consumers who sway their peers' purchasing decisions by sharing their insights and opinions on products, services, and brands.

After signing contracts with Vietnamese KOCs, Chinese suppliers immediately transport products to warehouses in Vietnam.

With this solution, transport costs and delivery times have been cut, said a local company specializing in trading Chinese merchandise online.

Warehouse leasing service boom

A representative from J&T Express Company told Tuoi Tre that fulfillment services have experienced significant growth in Vietnam over the past decade, developing alongside the rise of e-commerce.

As online sales have become more competitive and the demand for faster delivery soars, sellers are increasingly focusing on selling products while partnering with transport companies to ship the goods to their customers.

Establishing warehouses in Vietnam will help expedite deliveries and lower transportation costs.

The representative added that sellers and producers will store goods locally, allowing for packing and shipping once new orders are secured.

Vietnamese, Chinese firms join hands to develop logistics centers

To meet the growing transportation demand between Vietnam and China, many Vietnamese logistics companies have established warehouses near the border and partnered with Chinese counterparts to create logistics centers aimed at expediting the delivery of goods.

Viettel Post, a subsidiary of military-run giant Viettel, has collaborated with authorities in Nanning City to build a logistics center, as well as with the administration in Pingxiang City to develop a Chinese-ASEAN agricultural product trading center.

Viettel Post has also launched intermodal train services to Nanning, slashing transport time between Nanning and Hanoi to just 12 hours and lowering logistics costs by at least 30 percent.

Meanwhile, SPX Express, a carrier for Shopee, has broken ground on a 106,000-square-meter automatic sorting center in Binh Duong Industrial Park, located in the eponymous province just outside Ho Chi Minh City, with an investment of over $30 million.

In 2023, SPX Express began operations at a 100,000-square-meter sorting center in Bac Ninh Province.

Cainiao, a logistics company under China's Alibaba Group, has constructed two smart logistics centers in Dong Nai and Long An Provinces, both in southern Vietnam, to support e-commerce platforms like Lazada and AliExpress.

Each of these centers is capable of sorting between one and 2.5 million orders daily.

Challenges for Vietnamese producers, retailers

A representative from the Vietnam Logistics Business Association told Tuoi Tre that the substantial investments made by Chinese enterprises in warehouses near the border and within Vietnam will create significant challenges for local producers and retailers.

Vietnamese companies, particularly small and medium-sized enterprises, find themselves in fierce competition with these Chinese giants.

However, there is a silver lining: if Vietnamese firms can leverage this burgeoning warehousing network to export their goods to the northern neighbor, they stand to gain considerable benefits.

By tapping into this infrastructure, they can enhance their market reach and potentially boost their profits in the process.

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