China Cold Chain Market Size, Share Trends & Analysis Report By Type (Storage, Transportation, Monitoring), By Application (Fruits & Vegetables, Dairy, Fish, Meat, & Seafood, Processed Food, Pharmaceutical), And Segment Forecasts, 2018 - 2025

Report Overview

The China cold chain market size was valued at USD 10.98 billion in 2016 and is poised for unprecedented growth over the forecast period owing to thriving organized retail sectors in the country. This is one such market that has benefited significantly from the growing penetration of connected devices. Warehouse automation includes cloud technology, robots, conveyor belts, truck loading automation, and energy management. The workforce management solution is used to minimize labor cost and includes picking optimization and workforce forecast.

The pharmacy application is witnessing a gradual growth in the country, which is creating a demand for efficient cold chain logistics solutions and their proper management in this sector.

Increasing concern over quality is also likely to influence market demand. Implementation of various regulations by government agencies to ensure the quality of food has urged warehouse operators to maintain five different temperature zones. Government regulations regarding food safety and technological advancements in cooling technology are major factors driving the demand for cold chain logistics in the country. Across China, the government is backed with several projects to enhance the development of cold chain solutions. For instance, in Tianjin, the government has developed aquatic products and processing and distribution centers to deliver refrigeration facilities to pelagic fleets offloading at the Tianjin port.

External factors such as the expansion of retail chains by multinationals, trade liberalization, and government initiatives to reduce food wastage are further expected to fuel market growth over the forecast period. Though China has no shortage of labor availability, logistics companies in the country are struggling to reduce costs, which signifies a lack of trained labor. Government initiatives to improve cold chain logistics management in China are likely to reduce barriers for U.S. logistics giants to invest in the country. Such investments are expected to enhance the country’s transport infrastructure.

However, consumers in the outskirts of tier 1 cities still prefer purchasing agricultural products from a wet market. This has resulted in limiting the full use of cold chains to tier 2 and tier 3 cities in China. On the other hand, cities such as Shanghai and Beijing are experiencing a rapid increase in demand for cold chain systems owing to the growing influence of Western food habits. Furthermore, consumers in China have become more aware of food safety issues.

China Cold Chain Market Trends

Growing population has led to the increased consumption of foods and beverages that has increased the demand for the packaging products and solutions. The increasing penetration of organized retail sector in China has propelled the demand for the packaged food. Though the Chinese cold chain transportation infrastructure has experienced continual improvements such as increase in ownership of refrigerated trucks in the recent past, the refrigerated truck suppliers market remains fragmented. The food retailing and pharmaceutical companies are using cold chain services to minimize the supply chain risks. Advent of cloud technology is expected to spur the IT spending over the projected period. Additionally, the cloud solution reduces the total cost of ownership and improve the logistics performance.

Investment in warehouse automation has been increasing over the past years to meet the customer requirements. High capital investment, running costs, and scalability of different picking methods are the key factors that restrains the market players to automate the warehouse. Additionally, advanced automation, software system, and high-tech advances in tracking system and warehousing demands skilled labor. Employee recognition is the major need for the logistics and warehouse sector that can be taken care by training the employees. Lack of skilled labor availability is anticipated to further restrain the market growth over the projected period.

Growing automation is changing the traditional warehouse operations enabling the companies to maximize the throughput. Order accuracy is achieved through automated materials handling (MH) equipment, robotics applications, and high-speed conveyor systems. The automated warehousing systems increase the storage capacity by 400% compared to the traditional forklift operations. Additionally, the automation also helps to use additional space for other activities, such as manufacturing and value-added services. In a smart warehouse, all the software and hardware technologies interface with each other. The technologies such as pick/put to light and voice-directed picking are gaining traction in the market to reduce the labor costs and improve the accuracy. High initial investment is expected to restrain the warehouse automation market; however, automation would reduce the typical warehousing costs such as staffing costs, recharging of batteries, and maintenance cost.

Type Analysis

Based on type, the market has been segmented into storage, transportation, and monitoring components. The transportation type segment has been categorized into road, sea, rail, and air. The monitoring components segment has further been segregated into hardware and software. Hardware includes sensors, RFID devices, telematics, and networking hardware equipment.

The storage type segment has been bifurcated into reefer containers and warehouses, which can be studied based on bulk storage, production stores, and ports. Reefer containers can be studied based on varied sizes/volumes/capacity of these containers into 20 ft., 40 ft., 48 ft., and 53 ft.

The storage type segment generated the highest revenue in 2016, whereas monitoring components are anticipated to portray the highest growth rate over the forecast period. Changing consumer preferences regarding plastic packaging of traditional materials, which include glass bottles, are predicted to influence the package food applications prominently.

Moreover, regulations laid down by the government of China in order to ensure food quality have urged warehouse operators to implement and maintain various temperature zones based on the need for product storage. Rising demand for latest, modern high-cube refrigerated trailers, vehicles, and connected trucks for logistics purposes involving cross-product carriage is expected to catapult the refrigerated transportation segment

Application Insights

By application, the China cold chain market has been segmented into fruits and vegetables, dairy, fish, meat, and seafood, processed food, and pharmaceuticals. The fish, meat, and seafood application dominated the China market for cold chain solutions and services in 2016 and is predicted to continue its dominance over the forecast period.

The addition of a variety of imported products into the country’s seafood market, such as Alaskan black cod, New Zealand oysters, Canadian lobsters, Scottish crabs, and Japanese lobsters, has resulted in shifting consumer preference to online seafood services. Thus, the online retailing of chilled and frozen foods, particularly seafood, has increased considerably and is likely to keep growing over the forecast period.

The processed food application segment is projected to experience unprecedented growth over the forecast period. Factors such as improved food packaging materials, continuous innovation in technology, and implementation of these technologies based on various application needs have facilitated the growth of processed food trading within the country.

Regional Analysis

The cold chain industry in China is expected to grow considerably over the forecast period owing to technological advancements in packaging, processing, and storage of seafood products. Moreover, rapidly growing demand and increasing cold chain infrastructure developments have made China a top market for cold chain development.

Based on city, the market has been segmented into Beijing, Shanghai, and other prominent cities, such as Shandong, Tianjin, Shenzhen, and Guangzhou. A number of international exhibitions and expos are conducted in prominent cities, such as the Shanghai International Cold Chain Logistics Expo. These exhibitions focus on promotions, launches, and innovational demonstrations carried out within the logistics solutions industry and related applications.

Other cities such as the Shandong province dominated the market in terms of revenue in 2016. Cities such as Beijing and Shanghai receive fresh produce from Shandong. Additionally, there are a large number of cold storages available in the province. The other cities segment is slated to show strong growth owing to a steady demand for various logistics services arising from the demand for food products, fresh dairy, seafood, processed food, and pharmaceutical products.

Key Companies & Market Share Insights

Providers of cold chain services and solutions, such as warehouses, logistics, transport, distribution centers, and cold chain trucks, are continuously focusing on upgrading their cold chain services. They are also focusing on the adoption of technological innovations and deploying IoT-like solutions to offer improved services.

Global players in the logistics industry are focusing on forming alliances and collaborative partnerships with local logistics service providers. This is sure to give players in China opportunities to improve their logistics and distribution networks and strengthen their delivery services.

The China market also shows potential for growth owing to increasing demand for seafood, frozen foods, and chilled foods via online channels. This is likely to pave the way for foreign investors and cold chain service providers to tap business opportunities in the country. Prominent players operating in the Chinese market include Swire Group, Articold Logistics Ltd., Shandong Gaishi International Logistics Group (Gaishi Group), SF Express, and Xianyi Holding Group, China.

China Cold Chain Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the China cold chain market report based on type, application, and city:

• Type Outlook (Revenue, USD Million, 2014 - 2025)

  • Storage

    • Warehouse

      • Bulk Storage

      • Production Stores

      • Ports

    • Refrigerated Containers

      • 20 ft.

      • 40 ft.

      • 48 ft.

      • 53 ft.

  • Transportation

    • Road

    • Sea

    • Rail

    • Air

  • Monitoring Components

    • Hardware

      • Sensors

      • RFID Devices

      • Telematics

      • Networking Devices

    • Software

• Application Outlook (Revenue, USD Million, 2014 - 2025)

  • Fruits & Vegetables

  • Dairy

  • Fish, Meat, and Seafood

  • Processed Food

  • Pharmaceuticals

• City Outlook (Revenue, USD Million, 2014 - 2025)

  • Beijing

  • Shanghai

  • Other Cities (Shandong, Tianjin, Shenzhen, Guangzhou, and others)