SINGAPORE logistics firms including Global Logistic Properties (GLP) are helping the booming Chinese e-commerce sector secure enough warehouse space to meet soaring demand.

Gross merchandise volume in the sector jumped 21.3 per cent to 9.9 trillion yuan (S$1.99 trillion) last year while online retail sales soared 42 per cent to 1.85 trillion yuan.

But the country is playing logistics catch-up. Modern warehouses available to support this growth represent less than 20 per cent of total warehouse stock, said Mr Stuart Ross, head of industrial at real estate consultancy firm JLL China.

"Many e-commerce firms are going without the benefits of modern warehouses. Facilities they have are typically on the outskirts... They have problems accessing the downtown central business districts, be it downtown Pudong or Beijing," he said.

Enter logistics firms such as GLP. It said space leased by e-commerce related customers has shot up at a compound annual growth rate of 105 per cent. Share of the total leased area by these customers jumped from 4 per cent in 2010 to 25 per cent today.

GLP's portfolio has tripled over that time. It leased 2.3 million sq m (24.76 million sq ft) of warehouse space - the size of more than 300 football fields - in the 2014 financial year. It counts online retailers such as Vipshop and JD.com and e-commerce delivery customers like Deppon Logistics, Best Logistics and Goodaymart Logistics - an Alibaba-Haier joint venture - among its customers.

Just yesterday, GLP announced it has signed new lease agreements for a total of 248,000 sq ft with two third-party logistics providers, including Best Logistics, which works with Alibaba.

In the first quarter of this year, Best Logistics leased 2 million sq ft worth of warehouse space, or the space of two Orchard Ions.

GLP's portfolio is growing fast: It starts developing about three warehouses every week, adding 190,000 to 200,000 sq m (2 million to 2.2 million sq ft) of warehouse space, and aims to hit 3 million sq m (32.3 million sq ft) this year. Location is a key selling point. For an average rent of 1.1 yuan per sq m a day, GLP offers warehouses near highways, with large floor areas, enough height and modern loading docks.

Location is particularly important for e-commerce firms, as they work with tight deadlines, promising same-day or next-day deliveries for some cities.

"E-commerce is driving demand for modern logistics facilities and the increasing focus on last mile deliveries is creating demand for a national network of cross-docking hubs," said Mr Ming Z. Mei, co-founder and chief executive officer of GLP.

Logistics firm YCH Group said it is in talks with e-commerce retailers in China to manage their end-to-end logistics requirements. In greater China, the firm has largely been managing raw material flows into clients' manufacturing facilities and other global hubs, managing spares and returns, and distributing finished goods to domestic and international markets, a spokesman said.

While YCH has e-commerce experience in Asean and India, it is relatively new to China. "Nevertheless, we see huge growth potential that may overtake the other countries."

Ms Mary Chong, head of eCommerce & Payments in KPMG China, said the firm expects China's e-commerce sector to continue its rapid growth. A report by McKinsey & Company has pegged e-commerce sales to hit between US$420 billion (S$525 billion) and US$650 billion by 2020, she said.

At the same time, the logistics shortfall is preventing some Singapore retailers from establishing themselves in the e-commerce space, said Mr Victor Tay, chief operating officer of the Singapore Business Federation.

For example, retailer Charles & Keith may have about 70 shops in China but it does not yet have an e-commerce operation there.

"I suspect that without good supply chain partners, most players are wary of the last mile delivery to the consumers. Others like Sakae Sushi have also shared that food safety is important; without safe and seamless cold chain player, it will be challenging for them to establish in China," he said.