The rent of cross-border office buildings in Shenzhen’s Bantian has doubled, and sellers are saying they can’t bear it anymore!

Since the beginning of this year, the cross-border circle has been in a state of chill, and the topic that sellers complain about most is "poor order volume" and declining performance. Many sellers can no longer support themselves and are facing company bankruptcy, so they have to directly cancel their leases and close their offices.

Affected by the global economic environment, domestic economic development is also facing difficulties and challenges. Against the backdrop of a declining property market, the domestic office leasing market is experiencing a large-scale “rent reduction wave”.

The vacancy rate of Grade A office buildings in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen remains high, and rents continue to fall. Especially in Shenzhen, the average vacancy rate of Grade A office buildings rose to 24.3% in the third quarter of this year, ranking first among first-tier cities.

In such a market environment, the rent of an office building in Shenzhen has doubled, causing sellers to complain.

Shenzhen East Xwang office building rent doubled

Recently, a seller in the industry revealed that the rent of Shenzhen Dong Xwang office building has doubled in recent years, but the service has no lower limit.

As we all know, Bantian is a gathering place for cross-border e-commerce enterprises in Shenzhen. There are about 10,000 cross-border e-commerce enterprises in Bantian Street, and the proportion of cross-border e-commerce goods import and export in foreign trade has increased year by year.

Data shows that the scale of cross-border e-commerce transactions in Longgang District reached 170 billion yuan in 2022, with Bantian accounting for almost half of it.

DongXwang Building is located in Bantian Street, Longgang District, Shenzhen, and has attracted many cross-border e-commerce companies to set up offices here.

According to the seller, the rent of Shenzhen East Xwang Building increases every two years on average , and the rent increase ratio is very high. From 2016 to now, the rent has increased three or four times, and the huge rent has put the company's operation under tremendous pressure.

When the rent of Donghaiwang Building rose to more than 90 yuan per square meter, some sellers went to the management office of Donghaiwang to negotiate a price reduction, but the other party said that several big sellers rented at this price and did not raise any objections. The response of the management office staff left the sellers speechless and they had no choice but to compromise.

Some sellers even said that if the price continues to rise like this, they really can’t bear it anymore!

A seller said that his 13 companies were originally located in the Dong Xwang office building, but due to the continued increase in rent, they have all moved out.

Many sellers complained that DongXwang Building only collected money but did not provide any service .

Recently, many sellers who have offices in the East Xwang Building have encountered problems with abnormal company addresses.

One seller reported that his company did not register with the property management of the Dong Xwang Building office building, and was then reported to the Industrial and Commercial Bureau by the Dong Xwang Building. The Industrial and Commercial Bureau pointed out that the company's address was abnormal. Then the company's administrative staff went to negotiate with the property management, but the property management refused to handle it and asked the boss to contact them directly .

Another seller said he had encountered the same problem. He consulted the property management of Dong Xwang Building for a solution, but the property management said they could only provide proof of their current use , so he went to the Industrial and Commercial Bureau to make changes himself .

Office rents have been rising, and the seller’s company address anomaly has not been resolved efficiently and promptly.

What's more, a seller who works on the first floor of Dong Xwang Building said that his office was flooded by water during the recent rain, but the property management did not solve the problem immediately. Some time ago, the pipe broke and kept emitting a foul smell, which was annoying for several days. There is a restaurant next to the company, which usually has a strong smell of oil smoke. Now the business has changed and started to renovate, and he is deeply troubled by the renovation noise, which is unbearable.

Today, many sellers working in the East Xwang Building are asking for reasonable rents and unconditional cooperation in registering companies to operate Amazon stores . They also hope that the property management company can improve the system of responding to tenants' daily demands quickly and reduce the rent for employees to apply for monthly parking cards . Ennet will continue to pay attention to the latest developments of the subsequent incident.

Due to the industry turmoil, many sellers choose to cancel their leases to save money!

The turmoil in the industry has made sellers nervous, and the increase in Amazon's various fees is raising sellers' operating costs. For those "shaky" companies, the rising rents have become the "last straw."

According to feedback from sellers, many companies in Shenzhen's Bantian and Huaqiangbei areas have sublet or terminated their leases due to rising office rents, with the areas ranging from a few hundred square meters to several thousand square meters.

Some cross-border companies even announced bankruptcy or relocation due to their inability to afford office rent.

It is understood that as companies are canceling their leases to save money, the vacancy rate of office buildings or shared offices in Shenzhen is on the rise.

In addition to Shenzhen, Guangzhou's office buildings are also experiencing rising vacancy rates and falling rents, and the office market is in a cold wind.

Under the influence of the market environment, in addition to the pressure on office rents, Amazon sellers have also seen a sharp increase in logistics, raw materials and other costs, shrinking category demand, and fierce market competition, further compressing the profit margins of cross-border sellers.

One seller said that four or five companies around his company have gone bankrupt, and the rest are struggling to survive. His own company has also laid off more than half of its employees.

The head of a cross-border company said that the current market environment is not good, with few orders and extremely fierce competition. Even some big sellers are seeking stability and resisting market risks by reducing staff and office space.

The growth rate of the US e-commerce market has dropped to 7%, the lowest in 14 years

The United States is an important market for Chinese companies going overseas, but its growth has now hit a bottleneck.

According to the latest research data released by Marketplace Pulse, the growth rate of the US e-commerce market has slowed to 7% this year, the lowest level since the economic recession in 2009.

According to a survey by the U.S. Department of Commerce, U.S. e-commerce sales are expected to reach $1.1 trillion in 2023, a 7% increase over the same period last year.

In terms of growth rate, the growth rate of US e-commerce this year is much lower than the level during the epidemic. In 2020, US e-commerce sales ushered in rapid growth, a year-on-year increase of 34%. In 2021, US e-commerce sales increased by 26.6% year-on-year. In 2022, entering the post-epidemic era, consumers began to return to offline, resulting in a slowdown in US e-commerce sales growth, with a year-on-year growth rate of only 8.3%.

Marketplace Pulse found that this year, Amazon, Walmart, and Chinese cross-border e-commerce platforms SHEIN and Temu will all see sales growth rates that exceed those of the U.S. market. However, due to the decline in consumer demand in the U.S. market, many small e-commerce platforms may face negative sales growth.

Although the growth rate of US e-commerce sales is slowing down, the penetration rate of US e-commerce has continued to grow in recent years. Looking at the third quarter alone, the penetration rate of US e-commerce rose from 14.8% in the same period last year to 15.6%.

Marketplace Pulse predicts that U.S. e-commerce sales will bottom out this year and then rebound, and the U.S. e-commerce market is expected to grow at a rate of 9-10% in the next few years.

Market saturation, rising costs, declining consumer demand ...the living environment of cross-border sellers is full of challenges.

In the increasingly complex overseas markets and highly competitive market environment, how to break through has become an important problem that most cross-border sellers need to overcome.

Office Building

Rising rents