One of every five beauty purchases online is made via the Amazon marketplace, according to a new report.
More than 6 billion packages were delivered in the first three-quarters of 2013, up 61.2% compared with the same period a year earlier. About half of parcel deliveries stem from online orders, the State Post Bureau of China says.
Lacking dominant national companies like UPS and FedEx, parcel delivery in China is fragmented. But growth in e-commerce is driving rapid expansion of the delivery industry.
There were 6.18 billion parcels delivered in the first nine months of 2013, up 61.2% from the same period a year earlier, the State Post Bureau of China reported recently. Those deliveries generated 99.6 billion yuan ($16.33 billion) in revenue for delivery companies, an increase of 34.9%.
China’s boom in online shopping has a lot to do with that growth. “About 50% of parcels delivered in China are created by the orders of online shoppers,” says Zhao Xiaoguang, vice director of the State Post Bureau of China.
During the period Nov. 11 to Nov. 16, which included shipments of merchandise ordered on Nov. 11, a big day for online sales known as Singles Day in China, there were 346 million parcel deliveries, the government agency says. That’s about half the number shipped during a typical month in the first nine months of 2013. Alibaba Group says sellers on its Taobao and Tmall online marketplaces shipped 171 million packages on Nov. 11 alone, representing half of the parcels posted during that e-retail sales event. Alibaba Group ranks No.1 in the Internet Retailer Asia 500 guide.
The State Post Bureau says the express delivery industry has been growing at 50% a year in China for the past three years. The agency’s data include state-owned companies and privately held Chinese firms as well as foreign delivery services. The bureau says there are 1000 shipping companies doing business in China, of which about 50 companies operate nationwide.
Among the 6.18 billion parcels delivered in the first nine months of 2013, 180 million pieces shipped to addresses outside of China, a 45.9% increase over the first three quarters of 2012, the State Post Bureau of China says.
Foreign delivery companies account for 70% of the cross-border shipments, says Wang Fang, a consultant works for Shanghai-based logistics consulting firm, China Express Consulting. Those foreign firms include U.S.-based UPS and FedEx, TNT Express of the Netherlands and DHL International GmbH of Germany.
Leading Chinese private carriers include SF Express Co. Ltd and YTO Express (Logistics) Co. However, several major retailers have obtained shipping licenses and invested heavily in creating their own delivery services to fulfill their online orders. They include Jingdong Mall, Amazon China, and Suning. Jingdong is No. 3 in the Asia 500, Amazon.com Inc. is No. 4 and Suning, No. 5.
FedEx and UPS obtained licenses to handle domestic deliveries in China in May 2012, but are limited to operating only in several large cities.
With all this activity, China’s shipping industry is maturing quickly, according to a recent report from investment bank Goldman Sachs, and competition is keeping prices low. Domestic delivery typically costs $2 to $3 per pound and packages generally take two or three days to arrive.