Higher delivery cost for e-commerce vendors ahead of Singles Day

Yang Jian
Leading courier firms have raised delivery costs for some e-commerce sellers to "regulate the market price" ahead of the Singles Day shopping spree.
Yang Jian
Higher delivery cost for e-commerce vendors ahead of Singles Day
Jiang Xiaowei / SHINE

A delivery employee sorts parcels on a local street during the annual Singles' Day online shopping extravaganza in November.

Leading courier firms have raised delivery costs for some e-commerce sellers to "regulate the market price" ahead of the Singles Day shopping spree.

Key courier operators, including the Shanghai-based ZTO, YTO and Yunda, as well as the Indonesia-based J&T Express, have announced a price increase for some of the online sellers "who have long been enjoying low-cost delivery services."

The price for individual customers won't be affected during the current round of price adjustment, the courier firms said in their statements.

Due to fierce market competition, the delivery prices for some e-commerce vendors have long been far lower than the actual costs to the courier firms, despite increasing labor and operational costs, ZTO Express said.

"The phenomenon has not only disturbed the market but also severely affected the stable operation of franchise outlets of courier firms," the company said.

"The price adjustment was introduced ahead of peak season to ensure sustainable quality services to customers," it added.

YTO Express said the price increase only targets online vendors paying lower delivery prices than the courier companies' operating costs. The prices for individual customers remain the same as listed on the official website.

A YTO official said a price increase of less than one yuan would impact the prices of online products, but only slightly affect online vendors' profits.

Price competition among delivery firms has forced many outlets to operate with marginal profits or even below cost. The company has stepped in to stop the price war and return to the market standard, the official said.

Yiwu, in neighboring Zhejiang Province, known as the world's biggest hub for small commodities, was once the main battlefield of the price war among courier firms. The city has thus become the most affected region during the recent price adjustment.

"The delivery price for small commodity vendors in Yiwu was extremely low because the courier firms aimed to occupy a bigger market share there," the official added.

The price increase is also part of the efforts to ensure the "lawful welfare" of the nation's large group of delivery workers spawned by the world's largest e-commerce market. Seven Chinese ministries and government bodies released a guideline in July to protect the welfare of delivery staff.

In late August, multiple courier firms announced pay increases for grassroots delivery employees by 0.1 yuan (1.5 US cents) for each package they deliver.

As a result, the delivery workers' monthly salaries are expected to increase by 500 to 1,000 yuan, depending on the number of packages they send.

The cost of courier services to consumers was also not affected by the adjustment.

Some courier firms such as YTO also stipulated that the additional payment must benefit each delivery employee and cannot be pocketed by franchise stores.

"The new policy aims to make sure delivery workers' income matches their efforts, especially during the annual shopping spree," the YTO official said.

Over 300 million packages are delivered across the nation every day, according to the latest statistics from the State Post Bureau of China. The number of deliveries is expected to reach 95 billion parcels throughout 2021, the bureau said.

Special Reports

Top