The price rises to double eleven Yiwu Express bids farewell to “one yuan free shipping”
The double eleven “feast” of express delivery was once again opened with price increases. “Yiwu express delivery prices have been increased in October, the previous single ticket price was around 1.3 yuan, and the current price is basically more than 2 yuan.” The collective price increase of close to 1 yuan, in the eyes of the couriers who have been around here all the year round, Yiwu Express Company” changed”. Chen Ke (pseudonym) told the Beijing News Shell Finance reporter that 2.1 yuan is already the “base price” for regular customers, and that merchants are required to ship at least 1,000 orders per day.
Zhejiang Province, a small city with a registered population of less than one million, is the “Express Capital” and is also a battleground for military strategists. Since the war broke out in 2013, the competition has continued to intensify. Normally, ordinary users need 15 to 20 yuan to send express delivery, but here is “one yuan free shipping”.
The price increase of Yiwu Express is regarded as a turning point in the industry. In the past, major express companies lost only a few cents. Now price increases have gradually become a trend, and the price war that has continued for many years in the express industry has collapsed. Recently, many express companies such as Zhongtong, Yuantong, Jitu, Yunda, etc. have issued notices to regulate express prices in Shanghai that are lower than actual operating costs. Previously, express delivery had already opened the “price increase mode”. Starting from September 1, many express companies such as Zhongtong, Yuantong, and Shentong will increase the end delivery fee by 0.1 yuan per ticket.
Experts judge that this year’s Double Eleven and even next year, express delivery prices will continue to rise. Although the price increase will not change the pattern of Yiwu express delivery, it means that the express delivery market will be re-divided, and companies with better services and more stable networks will be more competitive.
Yiwu express price enters the era of 2 yuan
This is the fourth Double Eleven that Chen Ke has experienced. For a Yiwu courier like himself, “no matter how large a lot of packages are, it’s just a small scene”.
It is delivered all the year round at Yunda outlets on Beiyuan Road, Yiwu. This year’s Double Eleven, Chen Ke’s biggest difference is that the price of express delivery has risen-the current average daily price of about 1,000 orders and an average weight of less than 300 grams is 2.1 yuan.
The price increase is close to 1 yuan, which is rare in Yiwu, and a collective price increase is taking place.
In this regard, Yiwu Fengwang courier Wang Jian (pseudonym) is not surprised, he said that not long ago, Yiwu Beiyuan area Fengwang branch has closed down. “Our SF Express is more expensive than Tongda. In the past, the single ticket price was 1.8 yuan, and Tongda was around 1.3 yuan. It was unable to compete and went bankrupt.”
Fengwang is a franchise express by SF Express. The price increase is not differentiated from Tongda. “We are also 2.1 yuan (within 1,000 orders and an average weight of less than 300 grams). Double 11 may also increase prices. There is no notice yet. “Wang Jian said that the daily average of 1,000 orders is large, so a single ticket price of 2.1 yuan can be given. However, this unit price is also tied to the weight of the merchant’s goods. He gave the reporter a detailed calculation method: 0.2 yuan for each additional 100 grams within 500 grams, and 0.1 yuan for each additional 100 grams above 500 grams.
“If the order quantity is small, I might price 2.3 yuan or even higher.” Wang Jian told Shell Finance reporter that even a familiar merchant, if a single ticket price of 2.1 yuan is given, the other party’s quantity must be large enough, and the quantity is not enough. It means that the unit price of express delivery is definitely high.
Many couriers told the Shell Finance reporter that the price increase of express delivery is also normal, and the peak season will increase in the second half of each year, especially before Double Eleven. “Express delivery actually didn’t make money in the first half of the year. It mainly depends on the second half of the year. Someone has to make some money.”
For many years, Yiwu has been not only a gathering place for Chinese express delivery, but also a low price for express delivery. Shell Finance reporter interviewed and learned that since 2013, the price of express delivery here has been steadily declining at a rate of 0.6 yuan to 0.8 yuan per year. Although there have been adjustments since then, the single ticket price on the counter of each express company has remained at about 2 yuan, but the actual express delivery price has always been below the regulated red line price (cost price is about 1.4 yuan).
Chen Ke said that the price of this round of Yiwu express delivery has been adjusted in October. Before the price increase, the single ticket price was around 1.3 yuan, and the current price is basically more than 2 yuan.
“It’s unclear whether the price will be lowered later. If it is to be lowered, it will be after Double Eleven.” He said.
He Hangbin, the person in charge of the Xinke Zhongtong branch in Yiwu, also said that the price of a single Yiwu express ticket is more than two yuan. The price of Zhongtong in Yiwu has always been higher than that of its peers by about two cents. This is mainly calculated based on the operating costs of the outlets, and finally has a price.
Shell Finance reporter learned that each express outlet has its own pricing power, but it is generally within the guidance price of the headquarters, and each outlet or courier who is more familiar with and has a larger order will give a corresponding preferential price, but the preferential rate is Limited, it is about 0.1 yuan.
Price wars under “1 yuan free shipping”
“Our products are very light, the profits are inherently low, and the price increase of express delivery is very lethal to us.”
As one of the regions with the largest domestic express delivery volume, the shock wave of price increases for Yiwu Express has arrived. Although this is regarded as an inflection point in the express delivery price war, the end of the price war will mean that the express delivery industry is moving towards a healthy development. However, in the face of price increases, many merchants in Yiwu have already complained and are helpless. Method”.
“Those big sellers with tens of thousands of tickets a day may want to consider moving out. If Yiwu Express raises the price and other places do not increase, the difference between a single order and the previous one will be about 1 yuan, so the next month will cost 300,000 to 1 million more.” Yiwu e-commerce merchant Wang Tao said.
For merchants with relatively small shipments, the single-ticket express delivery price can even reach 2.5 yuan to 3 yuan. The cost of express delivery prices has risen, and some businesses have told reporters that they want to switch to express delivery companies, but they have found that the prices are not much different.
Many Yiwu merchants stated that in Yiwu, SF Express and Zhongtong Express have higher prices than other Tongda systems, but their services are better. The courier companies feel almost the same.”
Yiwu’s express delivery of “losing money” is just a microcosm of the price war in the express industry. According to people familiar with the matter, the Yiwu Express price war began in 2013 and entered a white-hot stage in 2019.
In 2014, Yiwu embarked on the trend of express delivery industry, shifting from traditional LTL freight to express logistics. Many express companies from Tongda and SF Express joined in, and took the lead in completing the construction of express parks in the province and even the whole country, and produced agglomeration effects. The express industry has low barriers, and the industry has gradually moved towards low-quality competition in price wars over the years. Yiwu has also become a corner of the express price war.
“If you send one piece, then I will set a price of eight cents.” Such endless price wars have brought consumption to the entire industry, but the express companies have not relaxed their nerves. Once a company raises the price, the order quantity will be competed. Cannibalize. Over time, Yiwu Express has formed an unwritten rule “To fight a war, it must be a low price; to do it at a loss, not to do it”.
In fact, behind the Yiwu Express “1 yuan free shipping” is the “strategic strategy” of the express company. The single ticket price of 1 yuan or less obviously cannot even the cost, including the face order, delivery fee, labor, and infrastructure. However, as a price depression, Yiwu has a siphon effect on the surrounding area and even the whole country-express delivery has since increased, on the one hand The business volume of express delivery companies. On the other hand, for the national network of express delivery companies, Yiwu’s losses are spread across the country’s outlets, which is still a lucrative business.
Zhao Xiaomin, deputy director of the Postal Express Committee of the Shanghai Transportation Commission, analyzed that, on the whole, the price increase will not bring much change to the Yiwu express delivery pattern. The market scale has been accumulated for many years. Companies with better, more stable quality, and more stable networks will have a higher market share. A single company with a very low price means that it is difficult to guarantee services, and a differentiated pattern will follow.”
Is the turning point in the era of meager profit?
In recent years, competition in the express delivery market has been centered on low quality and low prices. As industry competition continues to increase, profits have plummeted and gradually entered the era of meager profits.
In the first half of 2020, Jitu started the network and officially joined the express price war. Affected by the epidemic, the express delivery industry entered the off-season last year. Therefore, express companies required lower-level outlets to complete a certain amount of orders. If they did not meet the standards, they faced fines. The outlets could only reduce prices to attract traffic, which caused a general drop in express prices.
In April and May of that year, with the easing of the epidemic and the resumption of express delivery, the price war was particularly serious under the pressure of performance, and it even fell to about 1 yuan per ticket. As of March this year, express delivery generally reached the “freezing point” of prices, and prices began to callback in April, and then slowly increased.
In 2020, in the ongoing price war, the Tongda Express delivery price war has been pushed to the entire industry, with various outlets under pressure, and many express company outlets have closed down one after another. However, the pressure on the terminal also directly leads to low-quality services, and there are frequent conflicts between the express terminal and consumers, which ultimately affects the brand image.
The battle started by the express delivery company finally ended in Yiwu Yan. In April of this year, a warning letter issued by the Yiwu Post Management Bureau showed that Gitu Express and Best Express had been repeatedly notified not to dump at prices far below the cost, but the company did not rectify as required. The Yiwu Post Administration issued an ultimatum, requiring the above-mentioned companies to complete their rectification before April 9, otherwise they will order the company’s distribution center to suspend operations for rectification in accordance with relevant requirements.
Supervision “gunshots”, Yiwu express pattern undercurrent surging, many express companies responded with price increases, and then the express single fare rose to a maximum of about 1.5 yuan.
The pace of express delivery prices did not stop here, and a dime once again stirred the express delivery market.
As the express delivery industry enters the peak season, starting from September 1st, many express companies such as Zhongtong, YTO, and Shentong will increase the final delivery fee by 0.1 yuan per ticket.
“A dime” seems to be almost negligible on weekdays, but the courier company said that if each courier sends an average of 200 pieces a day, it can increase income by about 500 yuan per month.
The collective increase in distribution fees is not sudden. In the eyes of the industry, the move is mainly a response to the policy.
The long-term vicious competition in China’s express delivery industry and the price war of low quality and low price are an indisputable fact. On July 8, 2021, seven departments in China jointly issued the “Opinions on Doing a Good Job in the Protection of the Legal Rights and Interests of the Courier Group”, which clarified the way to ensure the rights and interests of the couriers, including ensuring reasonable labor remuneration and strengthening the government. Supervision and service, etc.
Courier companies are engaged in price wars, and delivery fees have fallen severely, which directly affects the income of couriers. Crude operations such as fines and escrow have also severely squeezed the end. The above-mentioned “Opinions” stated that it is necessary to formulate the “Guidelines for the Accounting of End-of-Express Delivery Fees” and the “Standards for Courier Labor Quotas”, and establish a collective negotiation mechanism for industry wages, so as to ensure reasonable labor remuneration for couriers.
The operation of the postal industry in September disclosed by the State Post Bureau shows that from January to September, the total business volume of express service companies across the country completed 76.77 billion pieces, a year-on-year increase of 36.7%; business revenues totaled 743.08 billion yuan, a year-on-year increase of 21.8%. In September alone, the business volume of express service companies across the country was 9.45 billion, a year-on-year increase of 16.8%; business income was 92.14 billion yuan, a year-on-year increase of 11.8%.
In mid-October, the domestic A-share listed express delivery company issued a report card for September 2021. YTO Express’s express revenue growth rate increased by 24.96% year-on-year, and the completed business volume reached 1.453 billion votes, all in a leading position.
It is worth noting that the price of a single ticket for express services is still declining, with Yunda, Shentong and SF Express dropping 0.47%, 3.21%, and 4.71% respectively.
Many experts said that not only the price of Yiwu Express is currently rising, but also because of the price transmission mechanism, all parts of the country will gradually enter the price increase channel. Due to geographic differences, economic conditions, and consumption levels, the price increases will vary, but the probability of large Yiwu businesses moving.
After the era of low prices, test the service of express delivery companies
In recent years, the double eleven pre-sale time has been continuously advanced. On the evening of October 20, the “Double Eleven” pre-sale began, the first wave of battles started, and express delivery officially ushered in the peak of Double Eleven, and began to work overtime to receive and deliver goods.
During the shopping spree, Yiwu Express’ collective price increases quickly fermented. Whether the merchants will overcharge the express fees and whether the increase in express prices will affect the discounts on Double Eleven has become consumers’ concerns.
Recently, Shell Finance reporters learned from multiple express companies’ outlets in Beijing that there has been no change in the price of express delivery for the public, and the company’s notice shall prevail.
He Hangbin, who has many years of experience in the express delivery industry, believes that the increase in the price of express delivery by about 1 yuan is not great for end consumers. “Express delivery is only one of the service levels of online shopping, and it will not affect the price too much. Merchants must make the quality of the product itself. It is better for consumers to have a better shopping experience.” Zhao Xiaomin analyzed that from the user’s point of view, we still need to be prepared. The increase in express delivery prices will become a trend, and ultimately users and merchants will pay for it together. It is worth noting that it is not easy for express companies to make this money, because the requirements of users and merchants will be relatively higher as prices increase.
“When the express price is very low, the user tolerance is relatively high. Once the price gradually rises, the user’s tolerance is very limited.” Zhao Xiaomin said that behind the price increase, companies need to have stronger financial strength, better management and Operational capabilities, this is a greater test for enterprises, because users have more choices.
In the face of this price increase, some consumers have expressed their attitude: “The price increase is okay, where did the service go?” In addition, many consumers complained about the courier company online, including non-delivery by address. Throwing the express mail to the inn at will, and communicating repeatedly has no effect.
Many courier outlets told reporters from Shell Finance that the extended time of Double Eleven is a good thing for express delivery. The Shell Finance reporter learned that taking Yiwu as an example, the business volume of terminal couriers has increased by 2 to 3 times, and the daily processing capacity of outlets has reached 400,000, and the double eleven can increase to 800,000 to 1 million.
“The extension of Double Eleven will avoid the excessive concentration of online shopping cargo transportation, and the relatively dispersed pressure for outlets can also provide better services.” He Hangbin said.
During the Double Eleven period, the express outlets will usher in two peaks, November 1 and November 11. “It was the same last year. The peak came a little bit more slowly and lasted longer.” He Hangbin said that the shopping festival brought The test of the company mainly comes from the sudden concentration of express parcels, and at the same time, there is also pressure for merchants to pack. “The Double Eleven is now stretched out, and the pressure is less. At the same time, after several years of development, express delivery vehicles and operation automation have been improved. In the past few years, it was very nervous during Double Eleven, but now it is relatively calm.”
Zhao Xiaomin believes that the price war 1.0 model has ended. With the strengthening of supervision in Zhejiang, Shanghai, Guangdong and other places, the distribution fee has been gradually increased in recent months, and all interest groups are gradually realizing that high-quality development is the focus. From low-price competition to gradually rising prices, we will follow the path of high-quality development. This year, Double Eleven and even next year, express delivery prices will gradually enter the upward channel. The governance structure of express delivery companies, network stability, network operation, and terminal incentive mechanisms will all be tested.
He said that the changes in the industry will also focus on testing whether corporate services can keep up. This is a relatively big pain point in the express industry at present. If express companies have a relatively large advantage in services, they will have greater competitiveness in future competition. .
Beijing News Shell Finance reporter Cheng Zijiao