STO Express, one of China’s largest delivery companies, said it will increase its investment in Chinese domestic courier Fast Express by 133 million yuan (US$19.8 million), the South China Morning Post (SCMP) reported, quoting an STO filing with the Shenzhen Stock Exchange.
The Shenzhen-listed express delivery firm now holds a 10% stake in Shanghai-based Fast Express, becoming its third largest shareholder after the reinvestment.
Fast Express operates delivery networks in most major mainland Chinese cities and also offers service in Hong Kong, Macau and Taiwan.
“We will carefully differentiate the business of delivering big and small parcels after the cooperation with Fast Express,” STO Express said in a statement.
The SCMP report noted that STO Express is not the only courier to aggressively expand amid explosive growth in China’s delivery business. In May, rival YTO Express announced it would purchase a majority stake in Hong Kong courier On Time Logistics.
Express courier biz is going through the roof
China has remained the world largest market for the express courier business since 2014, driven by the popularity of e-commerce in the world most populous country. In the second quarter of this year, an average of 100 million parcels were delivered every day.
Industry revenue reached 397.4 billion yuan in 2016, up 43% from 2015, according the latest data from Chinese authorities. The number of delivered parcels jumped 51% to 31.28 billion in 2016, from 20.67 billion the previous year.
In another development, STO Express has been listed as a "preferred courier" by JD.com, China’s second largest e-commerce player after Alibaba.
Quality of courier firms becomes paramount
In a notice last week, JD.com recommended to merchants who sell goods on its platform, to work with five couriers starting this month. They are the company’s JD Express, SF Express, ZTO Express, Yunda Express and STO Express. In an earlier move, JD.com had removed Tiantian Express, owned by the Suning Group, from its platform as a shipping option.
The provider was ranked last in a comprehensive assessment on all players by service quality and customer satisfaction for the first half of the year, JD.com said in a statement.
According to the State Post Bureau’s satisfaction ranking list on Chinese delivery companies in 2016, the top three courier brands were SF Express, China Post’s Express Mail Service and ZTO Express.
Nol van Fenema