Online shopping soars, delivery service booms

SHANGHAI - Courier services are booming in China on the back of soaring e-commerce, generating immense business opportunities for delivery companies hoping to hit gold by feeding huge domestic demand.

Online shopping has skyrocketed in China, with total trade volume exceeding 10 trillion yuan ($1.6 trillion) last year, including three trillion yuan in cross-border transactions.

In 2013, China's e-commerce leader Alibaba handled about $250 billion' worth of merchandise, bigger than Amazon and eBay combined. Its trading volume in the second quarter of 2014 hit 501 billion yuan, up 45 percent year on year.

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The nationwide shopping spree has prompted many to wade into the courier business to supply Internet consumers eager to get what they order online, fueling a delivery service boom in the world's most populous country.

According to latest figures published by the State Post Bureau (SPB), a total of 9.19 billion parcels were delivered in China in 2013, averaging 25,178,082 packages a day, making the sector the second biggest in the world.

In the first nine months of this year, more than 10 billion packages were delivered, the SPB said.

Li Huide, deputy head of the China Express Association, said as online shopping continues to expand, particularly in rural areas, the delivery business is promising.

Battle amid shopping bonanza

Courier service companies are saddling up to take on delivery tasks as e-commerce giants vie with rivals to snare online shoppers during the week-long shopping bonanza around Nov 11, nicknamed as "Singles' Day," and the traditional Christmas and New Year shopping periods.

Chinese delivery services are estimated to process over 12 billion parcels this year, which might surpass the United States with an estimated 11 billion deliveries in 2014.

With China's 632 million Internet users creating vast potential for online consumption, it is crucial the companies get the services right.

Yunda Express, one of the country's leading delivery companies, employed 1,000 additional transport vehicles and more than 10,000 extra personnel in addition to 50,000 square meters of storage space to prepare for the upcoming November 11 spree.

Yunda's rival STO Express began securing adequate vehicles in September, with an estimated spending of 70 million yuan on 260 trucks in its Shanghai headquarters. Of its 1,200-plus outlets in the country, more than 80 percent have acquired additional vehicles, giving them extra firepower for the coming battle.

State-led China Postal Express & Logistics Co Ltd has also joined the fray, opening over 1,000 new road routes and applying six extra air freighters. Some 5,000 custom service staff and around 30,000 couriers have been hired to facilitate its EMS delivery services.

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