Menu of options due to shrink in world’s largest express delivery market.
Here’s the flipside to the FedEx/UPS parcel delivery “duopoly” we deal with in this country. In China, there are an estimated 8,000 companies offering express delivery, ranging from “one man and a moped” outfits to logistics companies with nationwide networks.
The mushrooming growth of e-commerce has created opportunity for anyone to jump into the small package business. In 2013, these companies delivered 9 billion express items, up a staggering 44 percent year-over-year. Revenue for the same period was up 30 percent, but the gap in those numbers is significant, said a study by Deloitte Touche Tohmatsu covering e-commerce in China.
While dealing with “800-lb. gorilla” delivery services poses its own problems, the bewildering array of express companies in China can make efficiency and visibility for shipments extremely difficult.
“In Europe, there are a lot of cross-border transactions; it is fragmented and more difficult to manage. China is even more challenging. It is the same size as the U.S., but logistically it is even more fragmented than Europe,” Federico Manno, eBay Enterprise head of e-commerce for the China and Asia-Pacific region, told delegates at the Post Expo conference in Hong Kong.
The Chinese express delivery sector is primed for a wave of consolidation, with the mom and pops squeezed out and carriers with comprehensive local coverage absorbed into the national firms. One thing that is not expected to change: the Chinese consumer, along with good service, expects free delivery, so the shippers who are subsidizing that delivery need to negotiate the most favorable deals possible.