Chinese regulators told ecommerce logistics players to stop excessive competition

On Friday (3 December), China’s State Post Bureau (SPB), the regulator for postal services in China, summoned key express delivery companies for a dialogue.

The meeting, chaired by SPB Director General Ma Junsheng, saw the participation of chairmen or CEO of six companies: SF Express, STO Express, ZTO Express, Yunda Express, YTO Express, and J&T Express. They collectively represent more than 80% of China’s express delivery market, according to Momentum Works’s latest “Who is J&T” report. 

In our opinion, these are the few key messages of the dialogue:

1. “The industry is huge in scale but the quality is not high; it is fast in growth but does not have structural advantages.”
2. Express delivery companies need to put more emphasis on the quality of growth, focus on structural optimisation, and fix the weaknesses/shortcomings.
3. The market participants need to serve the economy, the businesses and consumers. They need to better serve the flow of the economy.
4. The market participants need to be able to provide customised, integrated and global services – and transition into full fledged, integrated logistics providers.
5. The market participants need to ensure the stability of their agent/branch network, and protect the legal rights of delivery couriers.
6. The market participants need to resolutely oppose excessive competition as well as any activity that damages the interests of employees and the industry.
7. The market participants need to strengthen their rural networks, penetrate into manufacturing supply chain, and explore global markets with RCEP.