E100 – The Impulso Podcast – China ecommerce parcel volume surpassed 150 billion this year

In our 100th episode of Impulso Podcast, we unpack China’s milestone of delivering 150 Billion parcels in just one year – that’s enough parcels to fill up 30 million football fields! 

Tune in as we break down the numbers, explore the logistics behind this scale, and discuss:

• How goods sold at just ¥9.9 (with free shipping!) can still turn a profit
• Automation vs. human efficiency in handling millions of parcels daily
• Our first-hand observations from  visit to one of China’s busiest logistics hubs
• The story of the 150 billionth parcel

Don’t forget to like, share, and subscribe for more insights into the trends shaping the consumer tech ecosystem. Stay tuned for upcoming episodes!

Also available on Spotify and Apple Podcast

 

[AI-generated transcript]

Sabrina: [00:00:00] Hello everyone and welcome to the 100th episode of the Impausal Podcast. Wow, so we filmed 100 episodes already.

Sabrina: You filmed 100 episodes. 

Jianggan: No, I didn’t film anything. Phyllis is filming me. 

Sabrina: Do you guys record at 100 episodes? 

Jianggan: I just showed up and talked. But, I mean, 100 episodes, wow. 

Sabrina: Today is a hundred episode and we’re gonna be talking about even bigger number, which is hundred and 50 billion. 

Jianggan: How many zeros?

Jianggan: 10 

Sabrina: 50 billion. So why are we talking about this number? 150 billion. 

Jianggan: According to, the post post of China, which is the regulator of e-commerce, parcel delivery, the country has sent. A total of 150 billion parcels by the 17th of November this year. That’s a new record that I’ve 

Sabrina: set. 150 billion. That’s something.

Jianggan: So we’ll talk about this number as well. Yeah. Aside from the TV zeros, how do you make sense of it? [00:01:00] 

Sabrina: So I went to ask, I went to ask chair GPT, like, how do you make sense of this number? So if you assume all the parcels are the size of a shoebox, if you lay them out on the football field, you can fill 30 million football fields.

Jianggan: Do you know how big football field is? No, 

Sabrina: it’s 

Jianggan: huge. Yeah, 

Sabrina: like it’s huge huge but 30 million. I don’t even think there are 30 million. Did they use like the olympic 

Jianggan: sized swimming pools? Yeah, 

Jianggan: yeah. So if you were to stack them in a swimming pool, it would be 15, 1. 5 million olympic sized swimming pools. 

Jianggan: Okay. Yeah. But if anyone knows, that is how many parcels hundred and 50 billion is right. And of course comparing that to the rest of the world. So we have a quick chart here. 

Jianggan: So there are some statistics about parcel volume in other places in the world.

Jianggan: Uh, in the U S this company called the Pitney Bowes, which publishes the annual parcel shipping index. So their statistics for last year for the U. S. is 23 point, 22. 3 billion [00:02:00] parcels. So if you put that number in perspective, I think China sends about six, seven, seven 

Sabrina: times, 

Jianggan: seven times the number of parcels in the U.

Jianggan: S., uh, for a population that’s about four or five times, three billion, 300 million, which is a 1. 5 billion, yeah. And the whole of Southeast Asia. So JNT express, which is one of the largest e commerce delivery companies in Southeast Asia, they publish their market tracking data every half a year. So according to them and the whole of Southeast Asia since about 15.

Jianggan: 4 billion. So that’s like one out of 

Sabrina: nine, 10%, 

Sabrina: Yeah when so this is like compared to the rest of the world, right 150 billion and that comes to about an average of about 466 million parcels a day day.

Sabrina: Yeah a day and what they reported as peak The daily parcel volume was 729 million. And what’s interesting about this 

Jianggan: population of Southeast Asia seven. Yeah. 

Sabrina: Is it bigger than the population of southeast? A 

Jianggan: [00:03:00] little bit bigger. Yeah, a little 

Sabrina: bit bigger, right? That was the peak. But what was interesting is the peak actually happened on the 22nd of October.

Sabrina: Which is a weird date, right? We were discussing this. There’s nothing special about 22nd have 

Jianggan: birthdays on that day. Okay, 

Sabrina: it’s not, it’s a weird date. It’s just, for e commerce companies, it’s not a special occasion, right? It’s not like the, let’s say, 6 18, or the 11 11 sales. In fact, it’s before the 11 11 sales.

Sabrina: So why was the peak? That’s a random 22nd October. I want to say like a random Thursday. Maybe it wasn’t a Thursday. 

Sabrina: There’s a random Tuesday. 

Jianggan: I think What just 

Sabrina: happened on a random Tuesday? 

Jianggan: So do you know how that W11 in China works, right?

Jianggan: I mean, in the past it was one day, right? I mean the sale starts on the day itself. Then you used to have like this huge numbers in, okay, during the first 10 seconds, how many owners have made, I mean, how, how many [00:04:00] parcels have been sort of secured. But over the years, I think W11 has evolved into a almost like month long event.

Jianggan: So different platforms run a little bit differently in terms of actual dates, but many of the platforms will already have lots of orders being sort of, I think, I think that the stack of the sales period. So most of the sales actually happened before W11 itself. 

Sabrina: So this was likely a result of the W11 sales.

Jianggan: I mean, it’s 

Sabrina: definitely, 

Jianggan: it’s definitely related to W11. By the way, I think talking about this year’s W11. Lots of people have been trying to use W11 to gauge about the sort of consumer confidence and stuff. And as usual, the leading players have not announced the exact numbers, right? Because as we said in the past, if the macro economy is in a state that people are not exactly confident, will you release a number which is too good?

Jianggan: That makes you stand out in an awkward way. If you release a number that’s too bad that sort of reaffirms a sort of pessimistic narrative. So the best approach for [00:05:00] many of the Chinese players is to not release any numbers. But they generally 

Sabrina: do release numbers still, right? It’s like, okay, 

Jianggan: this year we, I mean, this category had a record, or we have that many like consumers online, but they don’t release direct sales numbers.

Jianggan: If 

Sabrina: you guys are interested in finding out more about the double 11 results of this year. Subscribe to our channel and we’ll do an episode about it soon. 

Jianggan: So, I heard from, many people who are involved in the campaigns for the platforms they seem to be very satisfied with the results.

Jianggan: They said the growth is good. The platforms which are defending their market share are saying that, Oh man, oh man’s defense. Uh, the platforms which are attacking the market share saying that, oh, we grew quite a bit. So, so possibly the whole thing grew quite a bit. Yeah. There’s a whole. And subscribe.

Jianggan: Subscribe. And stay 

Sabrina: tuned for a future episode where we go more in depth into the 11, 11 results of this year’s sales. But coming back to the, 150 billion parcel, right? Maybe a number that we were looking at that might be more relatable to everybody [00:06:00] is that on average, that would mean that every citizen in China, old, young, regardless of age, regardless of where you live Yeah. Receives 106 parcels a year. So that’s one every three days. Yes, three, every three to four days you receive parcel. 

Jianggan: Yeah. And if you think like half of the population are living in areas which are not easily reachable by e commerce, then I mean for urban residents, that’s probably a much higher number.

Jianggan: Yeah. 

Sabrina: So what’s funny is we were talking about this 106 parcel videos in the office, right. And our colleagues are sharing with us a TikTok video that we’ll show you guys now. So essentially it’s just people in China collecting their parcels. From e-commerce orders,

Sabrina: so it all just opened.

Sabrina: Well, I’ve, I’ve seen, seen things like this 

Jianggan: before, right? 

Sabrina: Yeah. Yeah. That, that, [00:07:00] 

Jianggan: so 

Sabrina: it’s a lot. 

Jianggan: That’s, that’s okay. I mean, I don’t know, like, but it was 53 years ago. I went to my mom’s hometown and I helped her collect the parcel from the security guard and full security guard. I mean he has a guard post.

Jianggan: It was probably as big as our office because it’s a large estate and the whole room filled with parcels. Like, and my mom said, Oh, I have this, this parcels. And the guy said, okay, go ahead and find yourself. Took us a half an hour to find all the parcels, she had like 25 parcels. 

Sabrina: So in some of the videos that we are watching, they have like a push cart to like take all the parcels.

Sabrina: Do you bring something like this? No, I 

Jianggan: drove from the basement of my mom’s block. 

Sabrina: Just filling 

Jianggan: into the car, it’s much easier. I 

Sabrina: can see why like, E commerce or buying things online such a big thing in China, right? This is something that you know The team does as well when we go to China for our trips and all we always buy things and we ship [00:08:00] it to the hotel Concierge And it’s because in another another article that we wrote about five years ago, you broke down five years ago.

Sabrina: Yeah So you broke down the unit economics of sending a parcel, right? So the example used in the article was obviously a bottle of detergent And this bottle of detergent was only 9. 9 yuan, which is about us 140 

Jianggan: So amazingly that, , with all this , swings of exchange rate, it has remained fairly consistent for the last five years.

Sabrina: So it’s amazing that they managed to send a bottle of detergent for 9. 9 yuan, US 1. 40, and there’s free shipping. 

Jianggan: I think free shipping is quite common in China, right? So you ship, and this 9.

Jianggan: 9 yuan free shipping is also quite common. 

Sabrina: So how can a company like, be it the e commerce company or the retailer, even make profit when you’re selling your goods at such a low cost, when you’re not even charging your consumers for the logistics? I 

Jianggan: think to do this, you need to break down, I [00:09:00] mean, what Consists of the cost of this particular parcel, right?

Jianggan: So obviously the trade market where there’s a lot of small items and look at the prices that those small items are sold there versus that you’ll find in markets in Southeast Asia. I think Elodie was talking about something she bought by 300 Yuan RMB, 

Sabrina: well, some like hair clip that she bought.

Sabrina: Yeah. Yeah. And, 

Jianggan: uh, and in that market in China, it’s like, what, it’s like 50 Yen for 60 or something like that. Yeah. 

Sabrina: Okay. Cool. 50 years. Yeah. . 

Jianggan: She’s very excited. And of course the production cost, I mean, if you go to resources, if you remove the intermediaries will not be much, right? So for instance, I think that detrition, I think we did some estimate the cost of production is probably like 4 

Sabrina: Yuan.

Jianggan: And then there’s the cost of like packaging and labor. We have huge volume. You have seen like how people pack and uh, 

Sabrina: and then 

Jianggan: sort, right? So that can be a huge economical scale. So the packaging cost is probably about 1 to 1. 5 yen. 

Sabrina: That’s about, in [00:10:00] USD, less than 20 cents.

Sabrina: Less 

Jianggan: than 20 cents, yeah. Yeah, yeah. 

Sabrina: Maybe 14, 14 cents USD? 14 

Jianggan: to 20 cents. and that plus the shipping cost. So the city that we’re going to talk about, you can easily send things out for one or two yuan across the country. And many people say that. How can you do that right now?

Sabrina: How can they send it up like 

Jianggan: such a low 

Sabrina: cost? Yes But of course people watching will be like how can you how can your shipping cost be 2 yuan? Which is maybe like 40 cents usd and your packaging and labor cost is only like 14 usd so that’s less than Maybe 50 to 60 cents USD for shipping and packaging.

Jianggan: So at the end of the day, you send something for 9. 9 yuan, including the product, including the shipping and everything, you still make a profit. 

Sabrina: Yeah, 

Jianggan: it’s not a big profit, but you probably sell a lot of this. Yeah, you’re looking 

Sabrina: at the scale, right? But that’s also obviously when we’re talking about such a low cost of shipping and packaging, it’s the scale as well.

Sabrina: So when we wrote this article five years ago, [00:11:00] EWU sent about 4. 8 billion parcels a year and this year in 2024, they actually sent up 10 billion parcels as of 30th October. 

Jianggan: So they broke record as well. Yes, 

Sabrina: they broke, and the number is probably going to jump by quite a lot because during the end of the year, I think people do a little more shopping as well.

Jianggan: Yep. 

Sabrina: 1 billion. 

Jianggan: Of a city of 

Sabrina: The city has a population of 2 million? 

Jianggan: Yeah. 

Sabrina: 2 million. Singapore has a population of like 

Jianggan: 6 million. 

Sabrina: Yeah, but I don’t know how many parcels we sell nowadays. Definitely not anywhere close to that number. Nowhere close. 

Jianggan: So, where you, you were right, and this city is, a city where lots of people go and sell small items.

Jianggan: across the world. And this place allegedly has one of the best Turkish restaurants anywhere you can find, but we haven’t tried. but it’s a city where lots of businessmen that we spoke to saying that, okay, the reason why they set up their business is because of the cost of sending parcels out is so cheap.

Jianggan: And since everyone [00:12:00] has this belief that, okay, the cost of sending small items out there is so cheap, that attracts more people to set up their businesses there. So the whole place becomes a hub, right? 

Sabrina: Yeah, it’s like a trade hub now. And then of course, we actually had the opportunity to visit one of the key logistic players, right?

Sabrina: When we visited in October for our immersion. And it was very interesting. So this logistic player, they, on an average They process maybe 4 million parcels a day. And on the peak, I think they said it was like 8 million, right? So what’s interesting is that when we were at the facilities, we were looking at the whole process of how they split the parcels and all, and it’s just like multiple conveyor belts with like, there’s just a guy throwing parcels on.

Sabrina: Something we discussed as well that because it’s so full, a lot of the parcels started falling off the conveyor belt as well. And we were like, 

Jianggan: yeah, it’s just 

Sabrina: like a mountain of parcels. 

Jianggan: So, so we brought, we brought a bunch of people and they said, okay, shall we help them pick it up? And then they [00:13:00] realized they have a process for that.

Jianggan: Once in a while, somebody will come in and steal all the puzzles. I 

Sabrina: was looking at 

Jianggan: it. 

Sabrina: I remember I was telling someone, I was like, so this is where all my missing or delayed puzzles are. Because I bought some stuff as well. We were like, should we try to find, see if there’s any puzzles with our name on it?

Sabrina: But it’s too many. And it’s just like the skill, right? I mean, the kind of, machines that they showed us they use was quite interesting as well. So they use very automated, like conveyor belts for sorting. And if you see the video here, the conveyor belt moves really, really fast. It’s also spinning very, very neatly into the specific.

Jianggan: Yeah, they have cameras which , take images of the parcels from six sides and decide where, where to turn this to. And the video just now, if you can, you can play it again. So you see it going very fast, right? I actually had a discussion with the head of operations of that facility, and he was saying that.

Jianggan: Look, people look at how we are improving our facility over the years. We don’t do it [00:14:00] because we want like fancy technology or want to showcase to the world. It’s just because we have so much more than we need to cope with, but otherwise we’ll be out of business. So that particular sort of convertibility, if you can play that.

Jianggan: , it goes like 2. 5 meters per second. And I said, what does that mean? He said, a few years ago, when stuff has started automating. So now this is the fourth generation of the facility in this 1. 2 meters per second. 

Sabrina: Also, it’s almost double. 

Jianggan: So it’s more than double the speed of the conveyor belt. he also brought me around the facility to see some of the manuals, manual sorting has part of the process still has to be done manually. And the speed of the, ladies there doing the sorting is just amazing. 

Sabrina: They do. Are they like reading, they’re not reading the barcode themselves, right?

Sabrina: They’re they’re doing, so they’re scanning the barcode basically. 

Jianggan: Basically they would take the thing from, from the power and a machine will scan and they saw that one of the four sort of convey belts. 

Sabrina: Mm-Hmm. , 

Jianggan: I was asking the guy, why don’t you use like robots doing that?

Jianggan: Because there’s amazing technology, [00:15:00] uh, the robotics can do. And he said, we tried robots like many years ago, but they’re just not as fast as humans for that particular segment. He was like joking about it. He said, if you rely entirely on robots for that, we’ll probably need to deploy that it looks like sorting robots.

Jianggan: Uh, with, with a state that covers the entire city because, because they’re, they’re just slow. I mean, if you look at something like a videos, which I think we can find a video to, to play like this, like little, like yellow robots, which, which move the most of the things automatically.

Jianggan: Warehouses, 

Sabrina: sorting the, yeah. 

Jianggan: That thing is, it’s not that fast compared to humans and compared to the convey belts, 

Sabrina: not yet. But in the next five years, who knows? I mean, this is, yeah. Fourth generation, right? And then it’s like double the speed. Mm-Hmm. I’m sure for robots it’ll be the same. 

Jianggan: I think I like their approach to it, right?

Jianggan: Because over the years I’ve visited lots of logistic facilities and, uh, some facilities would like to show that, oh, this is the state of art robot. You can take photos here. By the way, this is the rest of the facility, which is 99 percent of the whole thing, 

Sabrina: [00:16:00] 99. 

Jianggan: 99 percent of the parcels.

Jianggan: Please don’t take anything from this thing. 

Sabrina: So they’re just showing the new technology. 

Jianggan: Um, yeah, big companies like to do that, but this guy’s a very, very practical. I said, Oh, look, I mean, we have to deal with like 4 million parcels a day, 80 million in peak time, and, we can’t afford any slack.

Sabrina: It’s a lot easier. And I think it was very interesting. So we actually saw their whole facilities, right? The volume and the scale really was just very, very big. 

Jianggan: And 

Sabrina: I guess that’s. That’s how China is able to do shipping and packaging at such a low cost. 

Jianggan: Yeah. I mean, lots of people are saying that, Oh, I mean, whatever that’s happening inside China is that foresight is a lot of good planning.

Jianggan: I think there was a bit of infrastructure that was built before all this volume came. But once this volume came, it becomes sort of self fulfilling, right? so more volumes and the facilities need to cope with that. They become more efficient that drives the cost down. And because the cost is low.

Jianggan: I mean, we talk about like returns, right? I mean not do free returns. Yes. To 

Sabrina: return goods in China [00:17:00] is so convenient. Yeah. So you don’t even have to return the product sometimes. 

Jianggan: Sometimes for many platforms you don’t need to return. If, let’s 

Sabrina: say it doesn’t reach you in time, you can just return the product and they’ll refund you.

Sabrina: You don’t even have to do anything, actually. You just text the seller, like, I’m leaving China. Please send back, please take back 

Jianggan: the product! So, mid of the, this year and that was once I was in , I think I was in Guangzhou. Then my mother in law in Malaysia, she was saying, Hey, look at this thing. Can you buy this for me and bring it back to Singapore?

Jianggan: And send to me in Malaysia. Yeah, look at it. I said, okay, that doesn’t make sense at all. Right. So, because the effort of buying, I mean, the binary is super straightforward and get that delivered on the same day, but it bring back to Singapore, then the postage from Singapore to Malaysia.

Jianggan: By normal post would already allow me to buy like a 50, 50 items of that, of that SKU. 

Sabrina: The infrastructure is just too different. 

Jianggan: Yeah. So, so I said, okay, why don’t you just buy it from Temu? And they saw this, I mean, not the exact product, but something very [00:18:00] similar. And it’s really cheap. 

Sabrina: And 

Jianggan: you can get that shipped directly to Malaysia, right?

Jianggan: Free shipping. Why not? 

Sabrina: Yeah.

Sabrina: Going back to the 150 billion parcel, right? I think we were discussing in office, what was the 150 billion parcel? Because they released like specifically what their parcel was. 

Jianggan: Like I think some, some random un agency, whose funding probably should be cut, , would release like Okay.

Jianggan: Oh, um, the 7 billion person is born. Yeah. Yeah. 

Sabrina: And uh, 

Jianggan: and I do think that okay is about the time. I mean, I think for parcels they probably have better tracking. But for babies, they would just pick a random person in a random place and say, Hey, this is the 7 

Sabrina: billion baby 

Jianggan: in the world. And then baby had no idea what was going on.

Jianggan: And then all the photos were coming in and stuff. if you do the calculation, 150 billion, right? Which means per second, there’s probably like a few thousand puzzles being solved. So which one is the exact 150 billion? So that’s probably selected, right? 

Sabrina: It’s probably. 

Jianggan: So [00:19:00] according to the authorities, so possibly picked for the 150 billion is a box of apples sent from this city called Tianshui in Gansu province.

Jianggan: I think to, to Chongqing, right? Chongqing, which is the province level municipality in the west, famous for its hotpot. And I do think that there are some considerations on picking, on picking this, right? It shows that what the government is supporting, which is, um, which is agriculture products of 

Sabrina: Local agriculture.

Sabrina: Local 

Jianggan: agriculture products. These 

Sabrina: are like special apples, kind of specific to that Tianshui. Yes. 

Jianggan: This, this apple called, um, Tianshui, like flower, flowery cow or something.

Jianggan: But anyway, so, so this looks amazingly similar to Red delicious, which is a, which is a type of apple produced in the U S growing in the U S. They also announced that this [00:20:00] parcel was sent by JNT express and the item was sold on Pinduoduo. So, you know, Pinduoduo over the past few years have always been playing this message that We’re helping redefine the agriculture supply chain to help the farmers sell their goods across the country.

Jianggan: So I think that probably got some positive light in the eyes of the government. That’s interesting 

Sabrina: because you would think for the 150 billion parcel, I mean, if you’re choosing out 5, 000, there has to be something more interesting than an apple. 

Jianggan: Like what can be more interesting than an apple? 

Sabrina: I think they can be more interesting than apples.

Sabrina: Apple 

Jianggan: keeps your medical bills away. Legend. 

Sabrina: So, thank you guys for tuning in to another episode of the Impausal Pod. We hope that you guys enjoyed this week’s episode. If you did, do like and subscribe, and of course, share the videos as well. And, like we said, this is our 100th episode. 

Jianggan: And also, uh, thank you to all of you guys.

Jianggan: I think more than a thousand of you who have decided to follow us after, since we [00:21:00] started producing video episodes. Yes. So, 

Sabrina: thank you. Please continue following us and supporting us and sharing with your friends as well. See you and bye. Okay. Enjoy.