China delivers nearly 100 parcels a person in 2023 as ecommerce giants Alibaba,, PDD slowly recover

Parcel deliveries reached a new high of 120 billion items this week, up 8.5% from all of 2022. The new milestone reflects growth in Chinese ecommerce, which saw steady growth in the third quarter, especially budget platform operator PDD. — SCMP

The number of delivered parcels in China this year has reached a new high of 120 billion items, the State Post Bureau said on Tuesday, “reflecting the upwards trend of the country’s consumer market”, offering good news for the country’s ecommerce giants grappling with a slow economic recovery.

The current rate of deliveries is an average of nearly 100 per person this year, making China the top market for parcel deliveries in terms of volume and intensity. India, the world’s most populous country, delivered 88.8 million parcels last year while the US delivered 21.2 billion in the same period.

The 120 billionth parcel counted by the bureau was a delivery of fresh flowers sent from Kunming, in southwestern Yunnan province, on Monday evening. It was sent by high-speed rail to Chengdu, in neighbouring Sichuan province, where it was scheduled to arrive on Tuesday afternoon.

With one month to go, China’s shipment volume is already up 8.5% this year from the whole of 2022, when 110.6 billion parcels were shipped.

The proliferation of parcel delivery in China is a result of the country’s extensive transport infrastructure, a courier army of millions, and the adoption of state-of-art technologies by China’s delivery firms. J&T Global Express, an Asian courier service group based in Shanghai, launched a US$450mil (RM2.10bil) initial public offering in Hong Kong this year, while Cainiao – the logistics arm of Alibaba Group Holding, owner of the South China Morning Post – is also preparing to list in the city.

Shipping volume was particularly high in November, according to the bureau, when daily shipments reached 430 million items as the delivery “business entered its peak season”. The country’s largest shopping event, Singles’ Day, takes place on Nov 11. Alibaba initiated the so-called Double 11 festival in 2009 as a one-day event, but sales now start weeks in advance.

The performance of parcel delivery “proportionally reflects” the growth of China’s ecommerce industry, said Mo Daiqing, a senior analyst at the Chinese ecommerce research institute 100ec. Online shopping “has been recovering this year in the post-pandemic era”, Mo added.

Beijing has made boosting domestic consumption a top priority this year. Economic growth slowed significantly from 2020 to 2022, when strict Covid-19 pandemic control policies upended daily life. The recovery this year has been slower than hoped.

In August, the central government introduced a major plan to boost consumer spending, giving full play to “the fundamental role of consumption in economic growth”.

Some major ecommerce platforms started to see things turn around in the third quarter. PDD Holdings, the owner of the Pinduoduo and Temu budget shopping platforms, nearly doubled its revenue in the three months through September, helping it overtake Alibaba in market capitalisation.

PDD’s larger rivals also recorded steady growth. Alibaba revenue was up 9% to 224.8bil yuan (RM147.11bil) in the same period, with operating profit up 34% to 33.6bil yuan (RM21.98bil). Rival reported 1.7% growth in revenue to 247.7bil yuan (RM162.09bil), while net income rose 33% to 7.9bil yuan (RM5.16bil). – South China Morning Post

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