The price adjustments of the domestic private couriers directly affects the profits of millions of online store owners who largely rely on domestic logistics firms to deliver their goods.
It also exposes one of the weaknesses of online transaction. If the goods need to be changed for some reason the cost of transport makes shopping online more expensive than shopping in stores.
Officials from the China Express Association will be holding a meeting with the Hangzhou-based e-commerce giant Taobao to discuss the issue.
Yunda Express was the first to announce the price rise. According to a statement published November 21 on its website, the company will be raising the basic charge by one yuan and additional charges by 0.5 yuan per each additional kg. For express delivery services covering remote areas, prices will be raised by two yuan for the basic charge and one to two yuan per each additional kg.
This may sound much but overall it is an average of 40% over the original charges.
The China Express Association said because the courier business expanded rapidly, logistics companies were too busy to get their business done and sometimes senior executives even had to help sort parcels. Moreover, about 80% of private courier firms were renting new warehouses, purchasing motors and hiring more delivery workers, which added to their expenditures. It is not often you hear business success listed as a reason for raising charges.
According to an online survey conducted by China’s internet giant Tencent, 89% of net users said the price rise would affect their online purchases.
China Daily reported that according to the Beijing Evening News a number of big online stores may build their own delivery channels to save costs, although Taobao President Jonathan Lu said the company had no plan to set up its own delivery arm. Yet.