📦 Milestone Achievement
In 2024, China’s State Post Bureau reported 100 billion package deliveries – 71 days earlier than the same achievement in 2023. This translates to 71.43 packages per person and a staggering 5,144 packages delivered every second. Major companies like Alibaba, JD.com, and PDD have been at the forefront of this surge, helping China maintain its position as the world’s largest e-commerce market, with online retail sales reaching 15.4 trillion yuan (US$2.1 trillion) in 2023, marking an 11% growth.
📈 Record-Breaking Volume
The data from the State Post Bureau shows that the daily peak volume of parcels exceeded 580 million, with an average monthly volume of 13 billion parcels. Monthly revenue in the courier sector also hit a record high, surpassing 100 billion yuan (US$14 billion). Despite this growth, the industry is grappling with profitability challenges due to intense price competition, which has led to reduced revenue per parcel for major courier companies like STO Express, Yunda, and YTO.
📉 Price Wars and Profit Challenges
The surge in parcel deliveries has come at a cost, as courier companies engage in fierce price wars to capture market share. This has pushed some small and medium-sized operators to the brink of collapse, as unsustainable pricing has eroded profits. Additionally, high product return rates, especially in categories like women’s clothing, where returns can reach 80-90% during peak periods, have further strained the sector. Cherry Wang, a shopper from Chengdu, exemplifies this trend, returning up to 70% of her purchases during sales.
🚚 Expanding Infrastructure
China’s courier sector's growth is supported by significant investments in transport infrastructure, particularly in rural areas. The Ministry of Transport has established over 1,200 county-level delivery centers and 300,000 village logistics stations. This has led to a tenfold increase in rural parcel deliveries over the past decade. Technological and logistical improvements have reduced delivery times, even in remote western regions, where parcels now arrive in just two to three days instead of a week.
Is China’s courier sector growth sustainable?
