Improving the logistics of China's warehouses has been prioritized by none other than Alibaba cofounder Jack Ma. Last year, Alibaba announced plans to lead a consortium to invest $16 billion in the first phase of building a national logistics business, a unit of Alibaba to be chaired by Ma. Alibaba declined to comment for this article.

SF Express to boost e-commerce business with food focus

Logistics sector set to upgrade, introduce standards

Alibaba's efforts haven't gone unnoticed. US e-commerce company ShopRunner, a rival to Amazon, will use Alibaba's domestic logistics network when it launches in China later this year.

JD.com Inc, ranked second in China e-commerce, is also investing. In a filing for its own US listing worth up to $1.7 billion, it said it plans to spend up to $1.2 billion over the next three years to buy land and vehicles and to build warehouses.

Meanwhile, real estate developers such as China Vanke Co Ltd are diversifying into warehousing as a hedge against a faltering residential property market.

"China's warehouse and logistics providers are trading at favorable valuations. In China, logistics space per capita is only 1/12th of that in the US, and providers stand to benefit as e-commerce expands," said Tony Hsu, a portfolio manager at Dalton Investments.

So far this year, GLP has built 280 warehouses in China, creating about 2 million square meters of floorspace at a cost of $1.2 billion.

Blackstone, Asia's largest private equity real estate investor, said it is in talks with several China real estate developers as it eyes the warehouse sector.