Rise of e-commerce inspires rapid growth and new partnerships
The logistics category appears for the first time in the BrandZ™ China Top 100 report. Internet brands, especially the e-commerce players, inspired the rapid expansion of the category. As logistics brands were publicly listed, they became eligible for inclusion in the BrandZ™ China ranking.
The inclusion of the logistics category in the China BrandZ™ Top 100 reflects how rapidly China’s economy has transformed. When the BrandZ™ China report first appeared, in 2011, today’s No. 1 brand, the internet and e-commerce giant Tencent, ranked eighth, and today’s No. 2 brand, internet and e-commerce giant Alibaba, did not appear in the ranking.
The largest of this year’s logistics newcomers, SF Express, was the last of the delivery services to go public. It ranks No. 11 in the BrandZ™ China Top 100, just below Agricultural Bank of China and above JD.com. The other logistics brands in the ranking are: YTO, Yunda Express, and ZTO Express, which rank No. 36, 37, and 38, respectively. STO ranks No. 54. At the time ZTO went public on the New York Stock Exchange, in October 2016, it was the second largest US IPO of a Chinese company, after Alibaba.
These brands organized the package delivery business in China, which had been fragmented and traditionally the domain of individual couriers. The industry growth forecast is positive because e-commerce is expanding into lower tier cities and international markets, as Chinese companies expand abroad, sometimes to support the Belt and Road initiatives of other Chinese companies.
To handle an anticipated surge in overseas business, the logistics brands are developing fleets of aircraft and freighters. Some of the brands are also entering joint ventures to facilitate international business. To extend beyond the 51 countries and regions that it now reaches, SF Express plans to partner with UPS.
The brands are automating to improve efficiency and ease the margin pressure that results from running a labor-intensive business in a competitive industry where raising prices is difficult. Some brands raised prices around Singles Day, the Chinese shopping holiday in November, when couriers handled over 330 million packages in a one day, according to China’s Post Bureau.