Competition Heats up in China's Express Delivery Sector

A market war is underway among express delivery firms in China as foreign and domestic firms battle for a share of the lucrative market.

Liu Xuede, deputy chairman of Sinotrans Air Transportation Development Company said Saturday that the express delivery market had grown rapidly as couriers sought to carve out niche areas for their services.

The world’s four major express delivery companies — FedEx, UPS,DHL and TNT — had all entered the Chinese market as partners with Chinese companies, and accounted for 80 percent of the international express delivery business in China.

FedEx regional vice-president of China and the Mid-Pacific region Eddy Chan said more and more foreign companies were attracted to China by fluctuating international currencies and new commercial opportunities since China’s entry into the World Trade Organization.

Delivery services extended to more small goods in daily life like flowers, cards and tickets, and domestic private companies had quickly carved out a share of the market.

Confronted with competition from strong foreign couriers and the mushrooming private sector, China’s only domestic competitor to the overseas players, Express Mail Service (EMS), a commercial arm of China Post, is improving services and technologies to retrieve its market share.

Since 1980, EMS has established 1,985 local branches under the State Post Bureau.

Express delivery companies exceed 1,500, of which about 450 are joint ventures.

Statistics show that among the nearly 34 million international express delivery articles in 2001, 34 percent were made by EMS, with the rest completed by couriers outside the postal sector.

China’s express delivery market had great potential, especially in the logistics industry, said Liu, adding that with the injection of more high technologies and service concepts, the express delivery business would see faster development in coming years.