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English>>China Business

E-tailers crowding express market

By Ye Xiao (Global Times)

14:42, October 24, 2012

Last Monday, Shentong Express stopped shipping goods for its partner after discovering that the e-commerce giant was directing most of its delivery needs to its self-owned express company.

The break in deliveries reflects the mounting tensions between China's e-commerce firms, many of which recently started building their own shipping entities to cut logistics expenses, and the country's numerous independently-owned express companies.

But when self-owned shippers co-exist with third-party couriers, conflicts are inevitable.

When online retailers enter the shipping business, they are invading the tuff of established shippers, many of which have fought hard to carve out their own share of China's highly competitive delivery market. At the same time, third-party couriers may find themselves caught between a rock and a hard place if their online retailing clients start demanding too much of their time and resources.

There is nothing wrong with e-commerce firms setting up their own delivery operations, but they should try to cooperate with veteran players in the logistics industry by trying to find their own niche in the delivery chain.

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