Growing express delivery capacity helps unleash consumption potential in China

China’s express delivery sector has continued to maintain robust momentum for growth since the beginning of 2021, with the number of parcels handled exceeding 50 billion as of July 4, close to that of the whole year of 2018, according to the country’s State Post Bureau (SPB).

It only took the industry six months to register a business volume of 50 billion this year, about two months earlier than in 2020. In addition, the sector serves an average of about 600 million customers per day, and handled up to over 400 million packages a day during the annual “618” (June 18) online shopping festival, continuously creating notable new records.

The rapidly rising business volume and increasing delivery speed reveal the country’s flourishing consumer market and witness a boom in online retail market of China.

Of the 50 billion parcels handled in the country, about one third were sent to rural areas, representing a fast growth. The consumption potential of rural residents has been gradually released as the network of China’s consumer market extends to rural areas, and manufactured goods enjoy increasingly smooth channels for transport, sales and marketing in the countryside.

While the number of parcels sent to rural areas increases, the amount of packages sent out from these areas has also surged, reflecting huge potential for sales growth of agricultural products in urban areas.

Due to poor logistics, Raohe county of Shuangyashan city, northeast China’s Heilongjiang province, a core area of national nature reserve for black bees, had difficulty selling local honey and increasing local residents’ income.

“After express delivery services became available in our village, we can sell individually wrapped honey on e-commerce platforms at a price of up to 40 yuan (about $6.16) per kilogram. Our life is much better now,” Li Shuying, a beekeeper in Raohe county, told People’s Daily.

According to Li, before the village was connected to the country’s express delivery network, her family could only sell the honey they harvested to a few passersby, and then sell the rest in bulk at low prices to processing plants.

In one of the areas covered by express delivery service outlets in Raohe county, where there are 21 beekeeping households and about 75,000 kilograms of honey is produced a year, the income of beekeepers has increased by 1.2 million yuan after express delivery services have been launched in the locality.

Encouraged by the SPB, courier companies in China have pushed ahead efforts to make express delivery services available in rural areas by adopting various models according to local conditions in recent years.

By 2020, all the townships in China had been basically covered by express delivery network, and more than 50 percent of the packages had been able to be sent directly to villages.

The ever-expanding express delivery network and improving express delivery services in rural areas have brought more and more agricultural products onto dining tables of urban residents, while helping rural residents enjoy continuous increase in their income.

As their income has grown, rural residents show stronger willingness to spend, which has further speeded up the introduction of manufactured products into rural areas and made rural market a new growth driver for express delivery sector and a new “blue ocean” of consumer market.

The service capacity of the express delivery sector decides to some extent the product mix of consumers’ online shopping list. After all, efficient express delivery services can surely make online shopping more appealing.

Looking forward, express delivery sector in China is expected to contribute more to unleashing consumption potential and facilitating the forming of a new development pattern.