Foreign firms eye China's crowded express delivery market

Sun Jan 22, 2012 9:37pm EST
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BEIJING (Reuters) - When 70-year-old Qian Yongfang of Nanjing in eastern China opened a package of mooncakes her daughter had sent by express delivery, two boxes of the sweet pastries were missing.

When He Ling, an online clothes seller, receives orders at peak seasons, she has to warn customers that what usually is a three-day delivery could take up to two weeks.

And when college student Ma Kun, 21, received a jar of preserved prunes sent by her parents, it was broken during delivery.

"I've learned to lower my expectations of Chinese delivery companies," Ma said.

Such complaints plague China's fragmented but booming express delivery industry, where delay, damage and outright loss of packages persistently erode Chinese operators' reliability and reputations.

This should be a huge business opportunity for foreign companies such as FedEx Corp and United Parcel Service Inc, which have vast experience in delivering packages around the planet and high-tech tracking and quality-assurance processes. But they are sparsely represented in China.

Foreign firms can deliver packages from abroad to destinations in China, but Chinese law forbids them from domestic delivery, packages sent between locations in China.

This year, however, some are hoping to take a bigger bite out of this expanding pie, applying for licenses for parcel delivery in the Chinese market.

The annual Lunar New Year, a week-long holiday that officially began on Monday, is one of the bigger annual headaches for the industry, with more than 200 million people traveling to hometowns across the country, jamming traffic and leaving express companies understaffed.   Continued...