Sources report that Guangdong Province’s express delivery sector is seeing a price correction, with rates increasing by roughly ¥0.4 per parcel, pushing the average price above ¥1.4. This floor price, implemented from August 4th, aims to eliminate below-cost deliveries, with penalties for non-compliance. Major players, including the “Tongda” network of express companies, reportedly began implementing the increase on August 5th.
One franchisee confirmed to media outlets that they received notice from their regional express company representatives on August 5th regarding the price adjustments. The price change was quickly adopted by nearly all major firms, who told CNBC that.
The price hike primarily impacts e-commerce parcels, especially lighter packages under 300 grams. This shift comes after a period of intense competition, where delivery companies prioritized market share through aggressive pricing, sometimes offering deeply discounted rates to attract large e-commerce clients and secure platform resources.
Previously, the intense competition led to unsustainable practices, with some areas reportedly offering unbelievably low rates. This era of ultra-cheap delivery appears to be waning.
Industry experts view this move as a necessary step towards rationalizing prices and reversing destructive competition within the express delivery sector. They believe these price adjustments could be a critical turning point, fostering a more stable and sustainable market environment.
Companies are now being urged to compete through innovation, improved management, and enhanced service offerings to deliver value to consumers. A singular focus on price wars, particularly selling below cost margins, may provide a short-term market share boost, but ultimately leads to compromised quality and risks jeopardizing consumer interests. Focus is now being shifted to long term profits.
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