Keeping pace and sprinting ahead of the Chinese transformation Hakan - - PowerPoint PPT Presentation

Keeping pace and sprinting ahead of the Chinese transformation

Hakan Bicil, Chief Commercial Officer

February 29, 2016 Long Beach, CA

China: is it slowing down or adjusting to new norms....

• China is progressively becoming a consumption driven country with growing middle class
• Imports are increasing
• Moving production (e.g. garments, shoes, furniture) abroad (e.g. Vietnam, Thailand)
• Significant investments in infrastructure, industries encouraged to move from East to West
• Exponentially growing e-commerce……….

2

Moving from Export to Consumption...

3

Booming handheld E-commerce...

4

• Tenfold more e-red envelopes compared with the 2015 Spring Festival
• On the New Year’s Eve only – over 8 billion red packets sent
• 516 million participants joined on WeChat for the virtual version of this

holiday tradition (compare to 1.357 billion of the total China population)

32 billion red packets sent out

• ver WeChat during the

Chinese New Year holiday

Production Moves to the West and South…

Note：1) Constant price; Pearl River Delta includes Guangdong and Yangtze River Delta includes Shanghai, Jiangsu and Zhejiang; 2)The national total is the sum of provincial statistic number, which could have small bias from national value of National Bureau of Statistics Source：Statistical yearbook of provinces and cities, EY analysis

Regional GDP distribution2 (2010 – 2014)

Less developed region Pearl River Delta Beijing-Tianjin-Hebei Yangtze River Delta 2014 63.6 40.6 5.8 6.6 10.6 2013 56.9 35.6 5.3 6.2 9.8 2012 51.9 32.4 4.8 5.7 9.0 2011 47.3 29.5 4.4 5.2 8.2 2010 39.8 24.7 3.7 4.4 7.0 CAGR % 8.7% 8.7% 9.1% 10.5%

Comments

► Economic growth rate in developed city clusters along the coastal line has entered ‘New Normal’ stage (lower but stable GDP growth rate) ► Despite of late development, developing city clusters in the rest part of China have showed stronger growth than coastal regions driven by: – Industry relocation – Migrant workers return home from coastal regions – Etc.

With economic development entered “New Normal” Stage, coastal regions are facing challenges of economic transition; meanwhile other less developed provinces, especially those in core city clusters, are demonstrating stronger growth potential

Unit: RMB Trillion

5

• Own Mature China Domestic

Transportation Network

• CEVA China Owns Assets for

100+ trucks, meanwhile has 2000+ contract trucks

• Online system tracking (TMS)
• Tax rebate invoice
• 10,450 orders delivered per day
• n 700 truck loads
• Regular Service Coverage of

204 cities in China

• Irregular Service coverage of

3000+ cities in China

Major Transport Hubs Primary Depots Connecting major transport hubs

CEVA s answer to both trends: domestic network

6

Conclusion

• Yes, China moves from Export to Consumption
• Moving production West and South creates new challenges and triggers

new logistical answers

• BUT: Slow down of exports is a relative slow down of growth...
• It is still growing
• % wise probably concerning but in absolute numbers still a logistical

challenge to be overcome

• Investing into and using infrastructure for a more balanced trade is

THE key for success!

7

8