Beijing Post launches express business

Beijing Post has launched an express business to compete with private express companies, a senior official at the company has said.

The new business will operate in Beijing's six major districts under the Commercial Delivery Office of Beijing Post, which was established on May 15.

"The new business currently focuses on the B2B sector such as delivering bank statements to companies, or B2C sector, such as delivering goods from large e-commerce groups to individual buyers," Luan Jinxing, deputy director of Beijing Post's Delivery Office.

According to Luan, Beijing Post has set up a new express system for the new business, with nine delivery centers, one distribution center and one distribution team made up of 300 couriers in six major Beijing districts, including Dongcheng, Xicheng, Haidian, Chaoyang, Fengtai and Shi Jingshan.

"This is a way to separate high-end and personalized needs from the traditional business of the Post Office," Luan said.

The courier sector has been booming in recent years. According to figures released by the State Post Bureau of the People's Republic of China on May 15, there were 1.71 billion parcels delivered in the first quarter of the year, 0.2 billion more than the total number in 2008.

But the private courier sector is taking most of the market share with a 75 percent volume of business and 69.1 percent of income.

Express Mail Service, an express service of China Post, which is known as EMS to people in China, is facing intense competition.

The new express business, which promises that parcels will be delivered the next day after they are posted, charges 5 yuan ($ 0.81) for cross-town delivery of parcels lighter than 500 grams, much lower than the current EMS prices, and even lower than the prices offered by some private express companies.

Bai Gaiqin, a courier of Shentong Express, one of China's private express companies, said they usually charge at least 6 yuan for cross-town delivery of parcels not exceeding 1 kilogram.

"Five yuan is really cheap. For parcels lighter than 500 grams, the price is really competitive," Bai said.

But the real edge of the new business is not the price or speed, because it still cannot deliver parcels on the same day they are posted.

"As a State-owned enterprise, our greatest advantage lies in the safety of the delivery," Luan said, "We seldom lose the customers' parcels."

Xu Xu, a staff member of a State-owned enterprise in Beijing, who often posts small gifts to her friends, expressed her trust in Beijing Post and in the new service.

"If Beijing Post offers a low-price express business to individual customers, I may choose it because it's a State-owned enterprise and I feel more secure," Xu said.

Luan said there are plans to expand the new business to deliver parcels among individual customers.

"By cooperating with governments, hospitals, companies and e-commerce companies, we may be able to deliver vegetables or Chinese medicine, for instance, to residents in the future," Luan said.

He added that the timetable for that is not finalized.