Amazon has launched its first smart warehouse in the Chinese manufacturing hub of Shenzhen, saying the facility could cut costs for local merchants by up to 45 percent.

The company on Wednesday promoted its first Global Warehousing and Distribution (GWD) centre as an all-in-one logistics hub for Chinese sellers targeting US consumers, an area where Amazon faces increased competition from Shein, Temu, and TikTok Shop.

The facility is designed to handle all logistics processes from when they leave local factories until they reach Amazon’s US warehouses, including local storage, customs clearance, cross-border shipping and inventory transfers.

Sellers previously had to handle these steps themselves.

Amazon said its service should be 45 percent cheaper than holding inventory in US warehouses.

It said it plans to offer similar services to manufacturers in the Yangtze River Delta and to expand distribution to Europe and Japan.

Shein, Temu and TikTok Shop have gained market share in recent years with shipments of consumer goods direct from manufacturers in China.

Shenzhen has represented more than half of China’s cross-border e-commerce and ranked first in the country for cross-border trade for the past four years, according to official data.