[photopress:fedex_in_China.jpg,full,alignright]Express delivery means you send something somewhere and it gets there very quickly. In parts of Asia that is quite a novel idea. In China the express delivery market is going through a major revolution.
There are four major foreign players who are used to fighting it out for market share elsewhere in the world plus China Post plus some private local firms and State-owned companies. All are busy working out strategies for success or even survival.
Fedex spent $400 million to acquire the remaining stake of its joint venture with the Chinese firm DTW Group. It also bought all of DTW’s assets in the domestic and international express delivery markets. DTW’s domestic express delivery business had losses of RMB60 million in the first 11 months of 2004, but Fedex still spent $400 million for DTW. Fedex wants the network.
UPS broke from its local partner — Sinotrans — and is going it alone and has the rights to international express delivery business in tier-one cities.
DHL announced its entry into the domestic express delivery market in 2004.
TNT has already begun domestic parcel delivery.
China Post, which is state-owned, is trying to fang market share — possibly through a favorable postal law although this will bring up cries of foul play from foreign and local private firms.
Sinotrans, another domestic delivery giant, seems to be considering whether it should exit the business, or up investment. Zhang Jianwei, Sinotrans’ president, used to say his company would continue to strengthen its position in the domestic market. Whether that still holds true is open for debate. The firm’s air delivery arm, Sinotrans Air Transportation Development, still holds 25% of the international express delivery market.
It will be a major tussle and only the rich and good will survive. But there is little doubt the battle is well worth fighting for the prizes are great.
Source: China Daily
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