China’s express delivery industry is responding to a broad government push to limit downward price spirals by raising courier fees in
e-commerce hubs, a move analysts said could ease pressure in the short term, though weak demand could cause the fierce competition between firms to persist.
After several local postal administrations made changes to their fee structures, the minimum delivery surcharge in Yiwu, Zhejiang province – the
world-renowned centre for the production of small commodities – rose by 0.2 yuan (0.3 US cents) at the end of July.
And starting in August across Guangdong province, another major e-commerce centre, minimum rates were increased by 0.4 yuan, Guotai Haitong Securities said in a note on Friday.
The price adjustment primarily affects e-commerce clients and will have little impact on individual consumers, the Shanghai-based business news outlet Yicai reported on Monday.
“The anti-involution drive will expand, with more regions likely to follow,” the Guotai Haitong note said.
“Involution”, a term used by officials to describe the
ruthless competitive cycle that has led firms in several industries to slash costs in pursuit of sector dominance, has gained more attention as China seeks to nurture these emerging sectors into reliable growth drivers.
In a meeting chaired by President Xi Jinping on July 1, the Central Financial and Economic Affairs Commission said Beijing needed to “lawfully regulate” this “disorderly low-price competition” while guiding companies to “improve product quality” and “promote the orderly exit” of outdated capacity.
