Express companies are ready to deliver years of rapid growth
China is likely to become the world's largest market for express services this year, lifted by the e-commerce boom and fast rural infrastructure development, a top official said.
Ma Junsheng, director-general of the State Post Bureau of China and a member of the Chinese People's Political Consultative Conference National Committee, said the government will support domestic delivery enterprises as they move to set up more service points in county-level markets and continue to expand in the nation's vast western regions.
China is the second-largest market for express services, behind the United States. Last year, more than 7,500 express companies were operating in China, compared with 5,327 in 2010.
Also last year, 9.2 billion packages and letters were delivered in and from China to global destinations by Chinese and international carriers, according to the Beijing-based China Federation of Logistics and Purchasing.
"The soaring economy and application of information technology, and the changing population structure between urban and rural areas, will push China's express sector to a further division among more sophisticated and segmented markets," Ma said.
Since State-owned Express Mail Service and FedEx Corp of the United States began to offer next-morning, next-day and third-day delivery services, and refunds for delayed packages a decade ago, China's express market has been transformed from price-oriented to service-oriented.
To attract more customers and grab limited market share, domestic and foreign companies have launched more personalized and segmented delivery services.
These include the businesses of delivering medical products, online booking and courier services, as well as buying and leasing more aircraft to support their operations.
Ma said the Internet will play a critical role in reshaping China's postal, logistics and express markets.
"With the rise of online shop-ping, China's e-commerce giants－Beijing Jingdong Century Trading Co, Suning Commerce Group Co and Tencent Holdings Co Ltd－are all in the process of applying for licenses to operate express businesses.
"Their participation will further upgrade the service level of China's postal industry," said Ma.
China has more than 600 mil-lion online consumers, including 130 million regular shoppers, mostly female and under the age of 35.
To rebalance its economic development model, China is transforming its emphasis from exports to domestic consumption. An increasing number of individual customers and the popularity of e-commerce mean carriers have more opportunities to generate profit from the nation's rising urban middle class and the growing number of online shoppers from rural areas.
"However, express enterprises are still inclined to focus on commercial services and the densely populated areas of big cities, because they're close to their regular customer bases," said Hou Hanping, a professor of logistics management at Beijing Jiaotong University.
"This means that initially, the demand for fast development and fierce competition will result in a reduction of rivals through price competition and diversified services ."
Hou said the market, at least in urban areas, will ultimately be dominated by a few capable companies. And in the long run, they'll rely more on capital management, communication technologies and better vehicles, instead of just putting more delivery staff onto motorcycles.
China is the second-largest market for express services, behind the United States. Last year, more than 7,500 express companies were operating in China, compared with 5,327 in 2010.
Also last year, 9.2 billion packages and letters were delivered in and from China to global destinations by Chinese and international carriers, according to the Beijing-based China Federation of Logistics and Purchasing.
"The soaring economy and application of information technology, and the changing population structure between urban and rural areas, will push China's express sector to a further division among more sophisticated and segmented markets," Ma said.
Since State-owned Express Mail Service and FedEx Corp of the United States began to offer next-morning, next-day and third-day delivery services, and refunds for delayed packages a decade ago, China's express market has been transformed from price-oriented to service-oriented.
To attract more customers and grab limited market share, domestic and foreign companies have launched more personalized and segmented delivery services.
These include the businesses of delivering medical products, online booking and courier services, as well as buying and leasing more aircraft to support their operations.
Ma said the Internet will play a critical role in reshaping China's postal, logistics and express markets.
"With the rise of online shop-ping, China's e-commerce giants－Beijing Jingdong Century Trading Co, Suning Commerce Group Co and Tencent Holdings Co Ltd－are all in the process of applying for licenses to operate express businesses.
"Their participation will further upgrade the service level of China's postal industry," said Ma.
China has more than 600 mil-lion online consumers, including 130 million regular shoppers, mostly female and under the age of 35.
To rebalance its economic development model, China is transforming its emphasis from exports to domestic consumption. An increasing number of individual customers and the popularity of e-commerce mean carriers have more opportunities to generate profit from the nation's rising urban middle class and the growing number of online shoppers from rural areas.
"However, express enterprises are still inclined to focus on commercial services and the densely populated areas of big cities, because they're close to their regular customer bases," said Hou Hanping, a professor of logistics management at Beijing Jiaotong University.
"This means that initially, the demand for fast development and fierce competition will result in a reduction of rivals through price competition and diversified services ."
Hou said the market, at least in urban areas, will ultimately be dominated by a few capable companies. And in the long run, they'll rely more on capital management, communication technologies and better vehicles, instead of just putting more delivery staff onto motorcycles.
