China has not been ‘boxed in’ this year with targets; they’ve completed a record of 120 billion parcels in the last 12 months. The State Post Bureau has attributed this to ‘resilience’ and an improving consumer market. It also claims it reflects China’s stable and positive economic momentum.
According to the report, 200 billion parcels are expected to be handled globally this year. But why is China the favorite parcel distributor? The bureau says China is the “most dynamic express delivery market.”
China Daily reports that the volume of express delivery business in China has increased sharply. Instead of delivering 10 million parcels a year, it now delivers the same amount in a month.
Expanding parcel delivery network benefits e-commerce
During the COVID-19 pandemic, China’s logistic companies handled just under 110 billion parcels. Asia News Network reports that 37 billion of them are sent from and delivered to rural areas.
The expansion of the network has given farmers and entrepreneurs in rural areas a chance to sell online to the international market. It boosted the movement of industrial goods from urban to rural areas.
This year, China’s parcel deliveries continued to increase rapidly, and most are attributing it to the expansion of the network.
Impact on economic growth
The bureau says the growth of express delivery comes from the “improvement of customer demand.”
Indirectly, this has also boosted China’s economy to new levels. “The recovery of the macroeconomic environment in China has promoted demand for express delivery services,” says the bureau’s Bian Zuodong.
Official data suggest China is the largest e-commerce market globally, generating almost 50% of the world’s transactions. In 2021, China became the largest e-commerce market. It had a revenue of $1.5 trillion, kicking dust in the US’ eyes.
e-Marketer projects that China’s retail e-commerce industry will grow even further in 2024, reaching $3.56 trillion.
Why is China dominating e-commerce?
Hongkong Bank, HSBC, attributes it to five reasons:
- Internet usage has increased dramatically: China has over 800 million internet users. Thirty million people in this group explored the internet for the first time in 2018.
- Internet users are huge fans of online shopping: In 2022, sales during China’s biggest e-commerce event, Singles Day, sales exceeded $25 billion in just a day, setting a new record.
- Mobile penetration is broad and deep: 788 million internet users in China use mobiles. Of these individuals, 72% use mobile payment methods.
- A vast logistics ecosystem supports the growth: E-commerce platform Alibaba manages a cross-country network of delivery firms that can process up to 30 million items daily through Cainiao.
- A lack of retail infrastructure: With limited options, consumers in lower-tier cities go online for more variety and options.
There are several lessons to be drawn from China’s e-commerce and delivery logistics expansion.
Investing in infrastructure is worth every dollar. Expanding China’s delivery network, especially in rural areas, was crucial in connecting previously underserved markets. Investing in physical and digital infrastructure can open new opportunities and markets.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.
