2009.02.20

Today, arvato Services China announces to partner with two Chinese companies : Telling and SMT, and to open up arvato Logistics Services China Ltd. The joint venture company is to provide world-class logistic service for the country's mobile phone and high-end electronic industry.

The new logistics services company is jointly invested by arvato Bertelsmann and two local mobile phone wholesalers. The joint venture will position itself as a high quality multi-regional logistics service provider, and provides distribution, pick and pack, fulfillment and value added services. The headquarter will remain in the Chinese city of Shenzhen while the overall plan is to expand the network nationwide.

The joint venture has setup one central distribution center in Shenzhen. It also plans to open several additional smaller warehouses throughout South China within 2009. Currently it focuses on mobile phones, and is taking over the management of the mobile phone distribution for both partners. Yet it plans to expand its scope quickly. The network of warehouses will be used to attract external businesses which are in need of high security and high quality warehousing and distribution. Raoul Kuetemeier, GM of the joint venture says: "The Shenzhen warehouse is only the first step in creating a nationwide network of distribution centers to cover Mainland China. The new company will focus on the warehousing and distribution of high value products and value added services as well as after sales management. It is forecast that arvato Logistics Services Shenzhen will distribute at least seven million mobile phones in its first year of operations in South China."

As an international company, arvato intend to focus on the local market, providing domestic distribution and value added services and help clients with its international experience and know-how to achieve the desired quality and transparency in the domestic logistics market. Its local partners can provide a safe start-up through local experience and a good standing in the mobile phone market. The city of Shenzhen, where the JV's headquarter resides, focuses on logistics for its future business development, and offers a positive setting for logistic service providers. Kevin Xu, CEO of arvato services China says: "arvato is interested in becoming a well-known and respected logistics services provider for Chinese companies in the telecommunication industry and being able to offer its logistics services worldwide to its existing international clients. Setting up a joint venture with mobile phone wholesalers in China is proved to be the most viable and effective option, to further improve arvato's China business and expand its logistic and delivery network from local to nationwide within the country."

Currently China hosts the world's largest mobile market and is showing steady growth rates. The market position of the JV will be unique since there are only a limited number of international companies willing to setup a fast network with more than 30 warehouses across the country to support local demand. It will focus on local warehousing and distribution and not export as most internationals do. Opening up the joint venture has showcased the interest and effort that arvato as well as Bertelsmann puts in China.