Status Quo and Forecast of Express Delivery Industry in China, 2017

 

  1. Express delivery industry will keep a high growth of 40% in 2017

Total express delivery business will reach 50 billion pieces and the revenue will be CNY 800 billion in 2020, and the corresponding business volume and the CAGR is 19% and 24% respectively. According to research, the business volume of express delivery will reach 60 billion pieces in 2020 (corresponding to the CAGR of 24% during 2015-2020, exceeding its estimated growth rate, 19% of e-commerce, GMV). We estimate that the growth rate of business volume will reach 50% in express delivery industry in 2016, and a 40% growth rate will be realized in 2017.

 

  1. Forecast on Market Pattern of Express Delivery Industry in 2017

Market share of the top 4 express enterprises decreased annually since 2009 but the revenue of the top 8 express enterprises keeps accounting for over 75%, for 3 out of the previous top 4 express enterprises, STO Express, EMS and SF are far behind ZTO, YUNDA, etc. in terms of market growth. It is difficult for new companies to enter in and is also hard for small companies to make breakthroughs because express delivery industry is featured with its scale economy and the first mover advantages (such as choosing  convenient transshipment centers).

There was some growth in the market share of “ZTO&YUNDA” in 2016. The market share of ZTO rose to 14.3% in the first three quarters of this year from 14.0% in that of 2015; that of YUNDA rose to 10.6% in the first half of this year from 10.3% in that of 2015.

 

  1. Forecast on Profitability in Express Delivery Industry in 2017

Profit margin rises due to the decline of unit price and marginal cost.

At present, online business profit made by express enterprises is only CNY 0.7-0.9 per piece; profit made by headquarters is CNY 0.3-0.4 per piece and that made by franchisees is about CNY 0.5 per piece. For instance, if inland express service charges CNY 8.5 per piece, franchisees need to pay CNY 8 for cost, including CNY 1 for express sheet, CNY 1.5 for transshipment, CNY 1.5 for delivery, CNY 1.5 for each courier, CNY 1 for local transportation, CNY 1.5 per piece for the cost of office rent, management and sales (both collecting and sending sides are taken into account).

 

Reference Reports:

Research Report on China Express Delivery Industry, 2017-2021

According to CRI, surging market demand brought about by the booming e-commerce in China stimulated the fast growth of express delivery.

A-share Listed Rail Transport and Logistics Companies – Profiles and Financial Data

In China, rail freight transport can be classified into truckload shipping, less than truckload shipping and containerized shipping by the conditions of the railway and current railway freight categories.