The Franchising Dilemma in the Express Delivery Industry: Impact on Service Quality and Company Survival

With the rapid growth of e-commerce, the express industry faces numerous challenges, particularly regarding service quality issues stemming from the franchise model. Consumers frequently experience delays, misdeliveries, and lost packages, with many express deliveries being returned due to the closure of regional outlets. While the franchise system has promoted industry development, it has also led to service disruptions as franchisees prioritize their own interests. Moving forward, the express industry needs to transition towards a self-operated model to enhance service quality and overall efficiency.
The Franchising Dilemma in the Express Delivery Industry: Impact on Service Quality and Company Survival

In recent years, China's express delivery industry has experienced unprecedented growth alongside the rapid development of e-commerce. Industry data shows annual growth rates exceeding 20%, with shipment volumes repeatedly breaking records during major shopping festivals like Singles' Day and Double 12. However, this explosive expansion has brought to light significant service quality issues that are increasingly affecting consumer experiences.

Service Failures Undermine Consumer Trust

Post-holiday complaints have become commonplace, with consumers reporting frequent delays, misdeliveries, and lost packages. These problems have reached a point where they significantly impact shopping satisfaction and brand reputation.

One consumer purchased a drone from an e-commerce platform that was successfully shipped from Shenzhen, only to be mistakenly delivered to the wrong recipient in Shanghai. This error not only delayed the customer's receipt of their eagerly awaited product but also forced the seller to dispatch a replacement, incurring additional costs.

In another troubling case, a book order was inexplicably returned to the sender after days in limbo, with the local delivery outlet ceasing operations without notice. Such incidents expose critical weaknesses in China's modern logistics network, leaving consumers frustrated and businesses scrambling to maintain service levels.

Franchise Model: Growth Engine or Quality Liability?

Industry research reveals that approximately 60% of express companies operate under a franchise model. While this approach enables rapid geographical expansion and broader market coverage, it also leads to inconsistent service standards across the network.

Franchisees, primarily focused on profitability, often underinvest in quality control and staff training. Some financially strained operators have even resorted to unethical practices like misappropriating client funds, jeopardizing the entire delivery network's stability and trustworthiness.

The prevalence of franchising has lowered market entry barriers, inviting numerous small players into the competitive fray. However, this dependence on independent operators proves particularly fragile in China's dynamic e-commerce environment, where companies must simultaneously manage massive order volumes while maintaining service quality and brand reputation.

The Path Forward: Structural Reform and Innovation

Industry experts increasingly advocate for a fundamental shift from the franchise-dominated model toward more company-operated networks. This transition could improve overall service quality while reducing risks associated with independent operators.

Key reform priorities include:

- Resource consolidation to achieve brand standardization and professionalization

- Enhanced employee training programs to elevate service standards

- Adoption of modern logistics technologies like intelligent routing and drone delivery

As online shopping continues to grow, express companies must recognize that service quality isn't merely an operational metric but a core component of brand value and customer loyalty. In an increasingly competitive market, only those prioritizing service improvements will earn consumer trust and secure larger market shares.

The journey toward self-operation requires developing comprehensive quality control systems covering every delivery stage from pickup to final handoff. Companies should also learn from customer service best practices in other industries, implementing multi-channel support systems including call centers and online platforms to promptly address consumer inquiries and complaints.

China's express delivery industry stands at a crossroads, facing both tremendous opportunities and significant challenges. As consumer expectations continue rising alongside economic development, companies must place customer needs at their core to enhance satisfaction and ensure long-term competitiveness. Only when consumers perceive meaningful service improvements can the industry achieve sustainable growth and realize its full potential.