Retail

eCommerce’s Demand For Chinese Postal Services

While some may be concerned about the fate of postal services, there clearly is demand in China.

According to China’s State Post Bureau, online purchases generate more than 21 billion of the 30 billion packages delivered this past year in the country. The year before saw 20 billion total packages, including both eCommerce and other parcels. And as Alibaba and JD.com are gaining international appeal, more shipments are going and coming overseas. Nearly 30 percent of the total are packages being shipped from the United States.

The increase in shipments is generating more investment in delivery services to keep up with the demand. Bloomberg reports that Alibaba has been investing in delivery options spanning out to the countryside of China, where customers reside on farms. And there is a need there because China’s State Post Bureau says these farmers sold more than $14 billion in products online in just the first three quarters of this year, with more than 80 percent of the villages where they live having one or more locations for shipping and receiving online orders.

In 2015, China roared ahead of the U.S. in terms of online shipping sales. China’s sales grew to $589 billion, and as a result there was a bottlenecking due to shipping infrastructure lacking in the country. Now, however, there are more than 183,000 shipping locations — large and small — throughout China, with 200 more slated to be built in the near future. There are tentative plans to add warehouses and employ more people to make deliveries.

Other infrastructure advancements include new technologies that help sort packages quicker, using industrial robots to do so. Ultimately, bringing down the costs while amping up the speed and bandwidth is what the Post Bureau says it has plans for in the coming years.

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