CHINA's express sector is facing a shake-out brought about by a massive increase in online shopping in which lesser players will drop out, Xinhua reports.
In e-commerce, statistics from market research firm IDC show that China's online shopping value totalled CNY784.93 billion last year, up 66 per cent year on year.
China's e-commerce development plan for 2011 to 2015 sees a sector-wide doubling in value to CNY18 trillion by 2015 with online shopping topping CNY3 trillion - meaning vast opportunities for the express industry.
But not all express companies will benefit. While some will enjoy a boom, others will go bust. One industry insider told Xinhua that since the beginning of the year, bankruptcies have been increasing.
Shentong Express vice president Liu Rongkun said the industry will be more and more professionalised, but profit will decline while a shortage of well-trained staff will become increasingly serious.
YTO Express chairman Yu Weijiao considers the upcoming three to five years as crucial for the development of the industry when those providing better valued service will grow stronger while those offering poor-quality service will be eliminated.
China posted an express package volume of 3.83 billion pieces, more than the full-year volume in 2011, with a sharp average monthly growth of more than 50 per cent with top players expecting a doubling of their businesses.
Quality, not quantity, is the issue today. There is wider application of information technologies, said Yunda Express vice president Zhou Bogen, whose company introduced handheld electronic data reading devices last year, enhancing data entry, tracking and automated handling, shortening delivery times by more than two hours.
Domestic express companies have also expanded their businesses through franchising. But to counter resulting quality loss, more are turning to direct management techniques. Yunda, for example, has completed turning its franchised distribution centres in major cities into directly-owned store operations.
In addition, personnel quality has been ungraded through investment in training with Shentong Express spending CNY10 million (US$1.6 million) on a scheme with Tsinghua University offering senior management courses.
The Shanghai municipal government has extended subsidies to express industry staff for training with 50 per cent of 6,000 delivery staff of Shanghai's ZTO Express having taken subsidised courses
