The Chinese government’s has a strategy to create a new driving force to stimulate economic development, with the aid of technology.
The policy, coined “Internet+”, intends to promote the integration of traditional industry with technology (mobile internet, big data, internet of things and the like), which applies to the manufacturing, financial, government, agricultural and medical sectors.
This also coincides with the continuing effort of modernisation within the logistic industry, where technology plays a pivotal role for express service companies in meeting the rapid rise in demand from consumers.
Some leading organisations have already utilised technology to expand their service offerings to customers, including intelligent storage for delivery and pickup, mobile payment facilities for swift cashless settlement and drone delivery (trial stage) for unmanned transportations of goods.
This prospective commercial sector has also attracted other big players. Alibaba, JD (China’s leading B2C online store), and Suning (China’s leading home appliance retail chain) have established their own express delivery franchise in the past few years to enter this lucrative market.
In parallel, the government has relaxed its regulations allowing foreign players to expand their footprint in China, which intensifies competition.
Regardless of China’s recent economic slowdown, the country’s rapidly expanding middle class and evolving consumer behaviour will continue to drive the online shopping demand, which requires extensive logistic support from the express delivery industry.
Considering China’s development, sheer size of population and territory, plus the explosive growth in e-commerce, it’s not hard to figure out the potential for express delivery service.
This sector will further accelerate its reform within the next few years, with market consolidation, technological advancement and foreign competition transforming this traditionally labour-intensive and relatively low-end segment into a modern customer service-oriented industry, integrating with China’s evolving e-commerce eco system, already one of the world’s finest.
Greg Au-Yeung is Head of Technology China at ANZ