China’s couriers take on the big players
Low-cost Chinese delivery companies are increasingly trying to take on global express carriers such as DHL and FedEx in China.
Companies such as Golden Monkey Express, a Beijing delivery service, are strengthening their international network and beefing up services at home.
Pony Express, which is also based in Beijing, even boasts an online track-and-trace service through a partner company.
China Post’s EMS service and global express groups such as DHL, FedEx and UPS still handle the bulk of international shipments in and out of China. However, as foreign executives look to the domestic Chinese market, the low-cost delivery services are said to be making their mark.
“(China has) this exploding market of little players . . . We’ve got a lot of very small, very aggressive people entering the market,” John Mullen, chief executive for Asia Pacific at DHL Express said.
DHL, which is owned by Germany’s Deutsche Post, in May became the first international company to launch a domestic delivery service in China.
There are about 1.5bn domestic express shipments in China each year, about 50 times the international express shipments to and from the country, according to a report on the industry by the US-China Business Council published in September 2003.
However, the market is crowded. As of December 2002, there were more than 1,500 express delivery companies in China, most of them small, according to the same report.
Overheads, as well as prices, are low. Zhang Bin, manager at Golden Monkey Express, which acts as an agent for DHL’s international shipments, says that Beijing delivery companies pay their workers less and offer fewer welfare benefits than their foreign rivals. He admits that he could not afford an online track-and-trace system like those used by the big international carriers.
Pony Express provides international services at a lower price by using space on Air China aircraft.
A Pony Express customer service agent said of the foreign competition: “I can tell you that our services are the same, and the difference lies in the profit margin.”
