Chinese E-Commerce: UK Warehouse Expansion Ahead

The UK's industrial real estate landscape is entering a new phase of growth, driven by an unexpected source: Chinese e-commerce operators preparing for major market expansion. Recent insights from a JLL industrial & logistics roundtable reveal why developers should pay close attention to this emerging opportunity.

Britain's digital retail maturity presents a compelling case for international operators. Online sales reached 27.9% of total retail in March 2026, maintaining consistent annual penetration around 27.5% throughout 2025 according to ONS data. This substantial digital adoption rate positions the UK as a natural European entry point for ambitious e-commerce players.

The warehouse demand generated by this online shopping behaviour is substantial. In Q1 2026 alone, approximately 27% of all Grade A big box logistics take-up in units exceeding 100,000 sq ft was driven by online fulfilment requirements. To put this in perspective, one major US e-commerce operator has absorbed nearly 50 million sq ft of Grade A big box space across Great Britain over the past decade purely for online fulfilment operations.

Alice Gu, an e-commerce specialist who travelled from JLL's Shanghai office to share her expertise at the London roundtable, highlighted the strategic drivers behind increased Chinese interest. Major players including JoyBuy (through JD.Com), Shein, Temu, and TikTok Shop are reassessing their UK logistics footprint for several compelling reasons.

Currently, Chinese retailers rely heavily on third-party platforms to reach UK customers, creating complex supply chain dependencies that determine where goods are positioned before reaching consumers. Recent tax regulation changes in both China and Europe around imports and shipping have further complicated cross-border operations, making localised warehousing more economically attractive.

Operational efficiency demands are also pushing these operators towards expanded UK infrastructure. Faster delivery times and streamlined returns processing have become competitive necessities. Early-stage logistics networks often find it more cost-effective to simply refund customers rather than manage reverse logistics, but this approach becomes unsustainable at scale. To improve operational economics and customer experience, these operators must build comprehensive supply chain capabilities that can efficiently process returns alongside forward distribution.

Historical take-up data tells an interesting story. Over the past decade, JLL has recorded less than 8 million sq ft of Grade A big box logistics take-up from Chinese e-commerce operators or their logistics partners, with demand predominantly concentrated in the Midlands region.

This modest historical footprint suggests significant expansion potential. To achieve comprehensive UK coverage and optimise their domestic supply chains in line with growing sales expectations, Chinese operators will need to substantially broaden their warehouse networks beyond current Midlands-focused operations.

"Chinese e-commerce operators represent a significant emerging source of demand for UK logistics space," says Melinda Cross, Head of UK Industrial & Logistics at JLL. "With less than 8 million sq ft of take-up over the past decade and networks currently concentrated in the Midlands, we expect to see substantial expansion as these operators build out the comprehensive UK coverage needed to support their growth ambitions. For developers, understanding the operational requirements and timeline of these occupiers will be crucial to capturing this next wave of demand."

For developers, this translates into tangible near-term opportunity. The requirement for geographically distributed fulfilment centres to serve the entire UK market, combined with the sophisticated operational needs of modern e-commerce logistics including returns processing capability, points towards sustained demand for purpose-built, strategically located Grade A space.

Want to learn more about how Chinese e-commerce expansion could impact your development pipeline? Contact the Industrial & Logistics team to discuss market opportunities and occupier requirements shaping the next phase of UK logistics demand.