The State Post Bureau announced a remarkable milestone on July 1, 2024: over 80 billion parcels had been delivered across China in just the first six months of the year. This achievement was reached 59 days earlier than last year, indicating a significant surge in parcel delivery volume. Up to June 30, the monthly average of deliveries was an astonishing 13 billion.
Accelerating Growth in Parcel Deliveries
At the end of April 2024, China reported 50 billion parcels shipped within the first four months of the year, achieving this feat 32 days earlier than in 2023. Data from the China Federation of Logistics and Purchasing revealed that the value of goods transported in the country reached an impressive 135.3 trillion RMB (14.72 trillion USD), marking a 5.9% year-on-year (YoY) growth.
Rural Delivery Improvements
E-commerce platforms have significantly expanded their reach, driving improvements in deliveries to rural areas. The increased competition among these platforms for rural markets has been a key factor in enhancing the efficiency and volume of parcel deliveries in these regions.
E-Commerce: The Main Driver of Shipping
E-commerce continues to be the primary force behind the surge in parcel deliveries. During the 618 shopping festival, which ran from May 20 to June 16, 2024, a staggering 13.77 billion packages were shipped, and 13.53 billion deliveries were made. This represented a 20% YoY growth. The extended duration of the 618 sales, with major platforms like Tmall and PDD starting their promotions on May 20, contributed to the record-breaking figures. Additionally, events such as the Dragon Boat Festival and Children’s Day during this period further boosted the number of parcels shipped.
New Regulations Impacting Delivery Drivers
In March 2024, new amendments to the Administrative Measures for the Express Delivery Market came into effect. These changes impose fines on delivery drivers for confirming delivery without a recipient’s consent, leaving parcels in collection boxes or stations without instruction, or mishandling parcels by throwing or stepping on them. The fines range from under 10,000 RMB (1,375.89 USD) to between 10,000 and 30,000 RMB (4,127.68 USD).
Increased Pressure on Drivers
These new regulations have added pressure to delivery drivers who are already struggling with tight schedules. The competitive pricing environment further exacerbates their challenges. In 2023, the price per delivery dropped by 4.1% to 9.15 RMB (1.26 USD), compelling delivery providers to seek diversification in their services.
Diversifying Services Amid Pricing Competition
To mitigate the intense pricing competition, delivery providers are diversifying their offerings. Services such as “instant deliveries” of groceries within an hour and other “local lifestyle” services are becoming more prevalent. This diversification strategy aims to provide value-added services to customers and sustain the growth momentum despite the pricing pressures.
The Future of Delivery Services
As e-commerce faces headwinds, it will be crucial to observe how delivery companies adapt and innovate to weather the storm. The evolving landscape of the parcel delivery market, driven by regulatory changes and competitive pressures, presents both challenges and opportunities for providers.
The extraordinary growth in China’s parcel delivery market in the first half of 2024 underscores the dynamic and rapidly evolving nature of the e-commerce sector. With regulatory changes and increasing competition, delivery providers are exploring new avenues to sustain and enhance their services. As the market continues to expand, it will be fascinating to watch how these companies navigate the challenges and capitalize on the opportunities that lie ahead.
