China Focus: Express delivery - the "dark horse" of China's economy

The express delivery industry, a "dark horse" of the economy, is leading the galloping growth of China's service sector and has quickly become deeply rooted in Chinese people's daily lives.

Express deliveries grew more than 43 percent in the first half of 2015, compared with the same period last year. About 14 billion parcels were delivered in 2014, up 52 percent, according to Ma Junsheng, head of China's State Post Bureau.

If all the parcels delivered last year were lined up end to end, they would circle the equator 70 times.

INDISPENSABLE

"I cannot live without express delivery," said Beijing office worker Yang Le.

Decades ago, few Chinese people dared to dream of sitting at home waiting for couriers to deliver goodies. Now, parcels may contain anything from documents or clothes and shoes to fruit, vegetables or even ice cream and spicy Sichuan hotpot.

Each Sunday before dinner, Yang receives fresh fish from an online food retailer. She places the order on Friday evening. Fishermen catch the fish in the Yangtze River on Saturday before they are rushed the thousand-odd kilometers to Yang's table .

People's addiction to express couriers showed itself most explicitly at Spring Festival, China's New Year celebrations, when the industry was almost brought to a standstill as most workers at the sharp end -- delivery boys on electric tricycles and sorters in warehouses -- went home for family gatherings.

In the 1990s, business people might have spent hours on trains to the nearest big city to send commercial documents, or queued for what seemed as long in the post office. People waited weeks for parcels to arrive. Express delivery has changed the way of doing business and it is clearly an improvement.

In manufacturing, express delivery is deeply embedded in the supply chain. When the assembly line of China National Heavy Duty Truck Group Co., Ltd (CNHTC), based in Jinan, Shandong Province, receives an order, an express delivery company one km away receives it simultaneously. The courier staff sort the truck parts and deliver them to the factory plants according to instructions. Thanks to the intervention of the express company, CNHTC's daily production increased from 50 trucks to 80; a mind-boggling 60 percent more trucks rolling out the factory door.

ECONOMIC PROPELLER

It's no surprise that the world's most populous country and second biggest economy should lead world in the absolute number of deliveries, but revenues soared by 42 percent last year to 33 billion U.S. dollars which is a staggering increase.

The booming industry is a direct result of the success of China's e-commerce, with Alibaba Group, the industry leader, setting a record for the largest ever IPO at the New York Stock Exchange last year. Wang Wei, head of SF Express, came from nowhere to rank 26th on the 2014 Forbes China Rich List with wealth of 4.2 billion U.S. dollars.

With almost 6 million workers employed in the industry, China's 8,000-plus express delivery companies have been a lifeline in terms of employment during the economic slowdown.

On average, every Chinese person received more than 10 parcels last year, and that is at a stage in the industry's development when only half of the country is covered by the delivery network. The rest are still relying on snail mail.

The State Post Bureau plans complete universal coverage of all villages and towns with express delivery by 2020.

Parcels delivered to underdeveloped west of China continued to increase during the first quarter and it is the least developed regions that growth is expected to be most awe inspiring. Endit