Shanghai logistics industry: small express delivery is squeezed out of the market

In addition, the average unit price of China Express is declining. According to statistics from the State Post, in the first quarter of this year, the average unit price of Shanghai Express China Express was 12.97 yuan, a decrease of 3.21% year-on-year. Among them, the average unit price of off-site express, which accounted for nearly 70% of the express delivery business, was 8.94 yuan, a decrease of 10.1% year-on-year. In fact, the average unit price of China's express delivery industry dropped from 26.99 yuan/piece at the end of 2008 to 12.70 yuan/piece at the end of 2016, a decrease of 47.05%.

Shanghai Logistics Company

The decline in the average unit price has caused the gross profit margin of the express delivery industry to continue to decline. Northeast Securities (000686, shares it) issued a report saying that the continuous decline in the unit price of express delivery has made express franchisees enter a low-profit era, with a net profit rate of less than 5%. The decline in express unit price is related to the price war in the express industry. According to the China Merchants Securities Research Report, from 2013 to 2016, as small express companies seized market share through price wars, industry concentration continued to decline, and the market share of the five largest express companies dropped from 66.1% in 2013 to 57.6% in 2016.

The concentration of the express delivery industry has increased, but there is still a large gap with foreign giants. After the listing of several major express delivery giants in China in 2016, the concentration of the express delivery industry has increased. According to data from the State Post Bureau, in March 2017, the express service brand concentration index was 77, a record high last year. According to the data from the State Post Bureau, the Shanghai logistics company's chart below shows the trend of the concentration of courier service brands drawn by Bread Finance:

The China Merchants Securities Research Report believes that due to long-term price wars, small express delivery companies will be squeezed out of the market due to severe losses, and industry concentration will continue to rise; merger and acquisition integration (such as Suning's acquisition of Tiantian Express) will further increase industry concentration. According to the China Merchants Securities Research Report, due to the long-term price war, small express companies have been squeezed out of the market due to severe losses, and industry concentration will continue to rise.