China Post cuts express mail charges
China’s State Postal Bureau (China Post) announced it will cut domestic express mail charges by 10% in a move to boost its presence in the lucrative yet highly competitive sector.
“We hope the price cut could enhance our market competitiveness and promote growth (of the express mail delivery business),” Hui Hongwei, a spokesman for China Post, said at a news briefing.
According to China Post’s annual report, its express mail delivery business, or EMS, recorded a 2.15% year-on-year decline in revenue to 4.886bln yuan last year.
The operating profit of the business plunged by 41.47% year-on-year to 603.74mln yuan in 2002 from 1.032bln yuan in 2001. However, this sector is essential for China Post to maintain a profit, since its overall net profit in 2002 was only 120mln yuan.
China Post said its revenues from its domestic long-distance express mail service rose 11.8% year-on-year in 2001 to 3.1462bln yuan, accounting for 63% of the total EMS revenue. Its inner city EMS service revenue in 2001 was 195.26mln yuan.
But it did not provide detailed figures for its domestic EMS service in 2002.
Xinhua news agency reported in February this year that China Post’s market share in the international express mail delivery service market has plunged to 33% from the 97% in 1980s because of competition from international mail delivers as being FedEx Corp, TNT Holdings BV, United Parcel Service Inc and DHL International Ltd. No figure was given for its domestic market share in this sector.
It has also been widely reported that many private mail delivery firms are contesting China Post’s dominance in the inner city EMS service sector.
