Fives Group as a French firm taps into e-commerce boom

Running against the time! A JD.com employee works hard in a logistic center in Beijing during the Singles Day Internet shopping festival on Nov 11. [Photo provided to China Daily]

But rising labor costs are increasing demand for logistics systems.

JD.com already runs a large operational center in Shanghai, where machines are humming every day.

"Chinese firms are stepping up efforts to upgrade centers and warehouses," Xu said. "The demand for advanced automatic equipment is growing fast."

Naturally, this presents commercial opportunities for equipment makers such as Fives Group, which sees China as one of its largest markets.

Last year, the company's sales revenue here was about 60 million euros ($64.2 million).

For the financial year that ended in December 2014, Fives reported global sales worth 1.56 billion euros.

"Logistics equipment will be one of our two most promising businesses in China," Sanchez said. "Despite the economic slowdown, huge opportunities exist as the country is encouraging traditional industries to embrace technology."

But Fives faces tough competition from rivals such as Dematic Group in Germany.

"Most automated logistic equipment is imported because companies in developed countries have advanced technology and more patent products," Tan Naixun, an analyst at Analysys International, a Beijing-based Internet consultancy, said. "Still, Chinese peers are making progress."

To expand its China footprint, Fives has launched new conveyor belt technology for logistics companies here. GENI-belt, as it is known, can process parcels of different sizes and shapes on the same sorting line.

"The deal with JD.com only marks the beginning of our ambition in China," Sanchez said. "As online shopping becomes increasingly popular in rural areas, we can tap into even more opportunities."

 

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