US e-commerce giant Amazon has launched its first smart warehouse in Shenzhen, aiming to cut storage costs for local merchants by up to 45 per cent as competition with Chinese rivals Shein and PDD Holdings’ Temu intensifies in cross-border trade.

The facility – Amazon’s first Global Warehousing and Distribution (GWD) centre – will serve as an “all-in-one” logistics hub for Chinese sellers targeting US customers, located at the heart of Shenzhen’s manufacturing base, the company said at a launch event on Wednesday.

The GWD centre is designed to handle logistical management after goods leave the factory floor in China and up to the point they reach Amazon warehouses in the US. This includes local storage, customs clearance, cross-border shipping and inventory transfers – steps that sellers previously had to coordinate themselves.

By consolidating these functions, Amazon expects to reduce storage costs for Chinese merchants by up to 45 per cent compared with holding inventory in US warehouses.

The company said it planned to extend the model to the Yangtze River Delta, another major manufacturing hub, and expand distribution to Europe and Japan.

The move underscores Amazon’s renewed push to retain Chinese merchants as competition for sellers, suppliers and customers intensifies. Rivals including Temu, Shein and TikTok Shop have been rapidly gaining ground in global e-commerce.