General

According to Huacheng Import and Export Data Observation, Amazon, an American e-commerce giant, has set up warehouses in eastern China to speed up the development of overseas purchase business, showing confidence in consumer spending.

According to the report, Amazon plans to set up a bonded warehouse in Ningbo, the main shipping hub of Zhejiang Province in eastern China, to speed up the distribution of overseas goods. This shows that Amazon has confidence in Chinese consumer spending against the backdrop of weak economies in other regions.

It is reported that Amazon announced at the China International Import Expo (CIIE) held in Shanghai last weekend that this is the first pre bonded warehouse for Amazon's overseas purchase business, which is expected to be settled in Ningbo in 2023 to help Chinese consumers buy goods from Amazon's UK and German sites.

Amazon Ningbo Front Bonded Warehouse is under the supervision of local customs. In the future, overseas merchants can transport goods to Ningbo and store them in the warehouse in advance. Amazon said that it is expected that the ex warehouse logistics will save an average of 4 to 5 days compared with the efficiency of overseas direct mail.

The company also said that Ningbo front bonded warehouse will be expanded to cover Amazon's US and Japan sites in the future, and more new overseas categories will be introduced.

According to Huacheng Import and Export Data Observation, before Amazon announced this news, cross-border e-commerce was experiencing explosive growth. This is partly driven by the COVID-19 epidemic, which has led many shoppers to stay indoors.

According to the report, in 2019, Amazon gave up its e-commerce proprietary business in the Chinese market in the fierce competition and instead focused on overseas goods. Through Amazon's overseas shopping platform, Chinese consumers can continue to buy goods from overseas merchants on some Amazon sites in other regions.

At the same time, the number of Chinese businesses selling goods to overseas customers through Amazon's global store opening service is growing. According to Amazon's data, the number of Chinese sellers who have completed brand registration on Amazon has increased 40 times in the past four years.

Murata Manufacturing Institute (Murata) of Japan is expanding its factory in Jiangsu, China, investing about 45 billion yen (1 yen is about 0.05 yuan - this net note) to build a new factory and expand the capacity of large multilayer ceramic capacitors (MLCC). Murata said that MLCC is its main product and its market share ranks first in the world. Although the demand for smart phones has slowed down, in the medium and long term, the popularity of electric vehicles and 5G mobile phones will still drive the demand of MLCC, Huacheng Import and Export Data Observation reported.

MLCC is a component that stabilizes the internal current of electronic equipment. Murata holds 40% of the global MLCC market.

According to the observation report of Huacheng import and export data, this investment comes from Wuxi Murata Electronics, the Chinese subsidiary of Murata, which produces MLCC. The company will build new plants in the existing plant area to increase the production of ceramic media film inside MLCC. The total building area of the new factory is about 51000 square meters.

In the medium-term business plan from 2022 to 2024, Murata initially set the equipment investment scale equal to the previous three-year plan, which is 640 billion yen. It is estimated that 210 billion yen will be completed by the end of fiscal year 2022. This investment accounts for about 20% of the annual equipment investment plan and is the largest one-time investment in history.

According to Huacheng Import and Export Data Observation, Wuxi Murata Electronics mainly provides MLCC for the communication and automobile industries in China. In the past decade, Murata's sales volume has nearly tripled, of which the proportion of sales from Chinese Mainland and Taiwan has basically remained around 50%.