Express companies are ready to deliver years of rapid growth

Ma said the Internet will play a critical role in reshaping China's postal, logistics and express markets.

"With the rise of online shop-ping, China's e-commerce giants－Beijing Jingdong Century Trading Co, Suning Commerce Group Co and Tencent Holdings Co Ltd－are all in the process of applying for licenses to operate express businesses.

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"Their participation will further upgrade the service level of China's postal industry," said Ma.

China has more than 600 mil-lion online consumers, including 130 million regular shoppers, mostly female and under the age of 35.

To rebalance its economic development model, China is transforming its emphasis from exports to domestic consumption. An increasing number of individual customers and the popularity of e-commerce mean carriers have more opportunities to generate profit from the nation's rising urban middle class and the growing number of online shoppers from rural areas.

"However, express enterprises are still inclined to focus on commercial services and the densely populated areas of big cities, because they're close to their regular customer bases," said Hou Hanping, a professor of logistics management at Beijing Jiaotong University.

"This means that initially, the demand for fast development and fierce competition will result in a reduction of rivals through price competition and diversified services ."

Hou said the market, at least in urban areas, will ultimately be dominated by a few capable companies. And in the long run, they'll rely more on capital management, communication technologies and better vehicles, instead of just putting more delivery staff onto motorcycles.

 

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