Chinese courier tycoons preparing for competition
Chinese express market will be eventful in the forthcoming September. With penetration of foreign-funded courier service tycoons into Chinese courier market and the opening of Chinese courier market to foreign-funded and private companies in 2005, China Railway Express Service (CRE), Zhai Ji Song Courier, and Postal EMS have launched their new services in succession to strengthen and take more market shares.
These actions taken by Chinese courier companies indicate a new round of competition is just around the corner.
CRE that monopolizes railway express will be the first to take action in September. Top executives with CRE disclose that, targeting at growing medical market, they will launch door-to-door “cold chain” transportation to customers nationwide. Cold chain is a new technology that can refrigerate goods at least for 48 hours. The new technology is expected to help CRE to take dominance in the area before foreign-funded companies tapping into Chinese courier service market.
Ling Min, head of account marketing department of CRE Beijing says that, another service, time-limit express service is also in full preparation. CRE will promote it to cities along Beijing-Shanghai Railway firstly in September, 2003.
After providing the service, CRE may deliver the goods to addressee before p.m.12 o’clock next day if it receives it before p.m. 5 o’clock. CRE asks their employees to deliver goods to addressee in 4 hours after train arrives in Shanghai.
Ling Min said that CRE would spread the service to all pair cities that could be reached in 12 hours by train.
Zhai Ji Song Courier Service, which is the first company providing time-limit service in China, is going to reduce its price. Zhou Jihong, from Business Department of Zhai Ji Song, released that its Marketing Department was making market survey, and would carried out a competitive price system very soon.
Managers with Postal EMS also said that they would launch some large scale services in the near future, including “door-to-door identity documents express delivery”.
The three Chinese courier tycoons are eager to take measures in advance facing the upcoming competition from foreign express companies. Chinese courier service market will open to foreign and private companies in 2005, however, Sino-foreign joint ventures are an exception.
Wu Dongming, director and general manager of DHL-Sinotrans, DHL’s joint venture in China, said in the middle of August that DHL would set up 17 new branches in China next year. DHL currently has 30 branches in China. Moreover, DHL’s business in China increases by 40% annually.
Earlier, American UPS has come into Chinese express market via cooperation with Yangtze River Courier Airliner that has an air freight license. United Parcel Service says ambitiously that it will establish 100 new agencies in China apart from the existing 220 agencies.
Boeing Company forecasts that air freight market will increase by 10.3% annually in China from present to 2010. But judging from UPS’ and DHL’s business increasing of 40%-45% annually in China, 10.3% increase is conservative for sure. China express market still has great potential. (Wang)
