E-commerce driving demand for warehouses

Alibaba Group Holding Ltd's plans for a giant initial public offering in New York highlight the vast potential for e-commerce in China - and the weak link the logistics industry must fix if those explosive growth projections are to be reached.

The aging warehouses that supply goods to customers across the world's second-largest economy are already creaking under the strain, lacking the state-of-the-art technology that has fueled the rise of Amazon.com Inc.

By 2020, China's e-commerce sector will be larger than those of the United States, Britain, Japan, Germany and France combined, KPMG reported. To cope with this surge, as much as $2.5 trillion may need to be invested in land and warehouses over the next decade and a half, one builder said.