In recent years, with the rapid development of e-commerce, major courier companies have turned their attention to the fragmented parcel market, which has become a key competitive battleground.
Fragmented parcel services, typically initiated by individual consumers, encompass various non-contractual shipments including personal deliveries and e-commerce return items. This segment demonstrates notably higher profit margins. According to industry reports, prices for fragmented parcels are often two to four times higher than standard delivery rates, revealing substantial profit potential.
The competition among logistics firms primarily focuses on reverse logistics for e-commerce returns. Live-streaming commerce platforms like Douyin and Kuaishou, with their unique marketing models, maintain exceptionally high return rates, creating massive demand in the return logistics market. SF Express, leveraging its air cargo resources and extensive delivery network, dominates the time-sensitive fragmented parcel sector with 63.9% market share. The company has amassed 699 million fragmented parcel customers through aggressive expansion of online and offline channels coupled with flexible incentive mechanisms.
Meanwhile, Tongda-affiliated companies including ZTO, YTO, Yunda, and J&T have actively entered the market, rapidly expanding their fragmented parcel operations. ZTO secured a partnership with Douyin in August, gaining access to return logistics markets in multiple cities. To boost fragmented parcel acceptance rates, courier companies have implemented various incentive policies, including commission structures that encourage couriers to collect more individual parcels.
ZTO's data reveals daily fragmented parcel volumes exceeding 5 million in Q1 this year, with full-year growth projections surpassing 50%. Yunda and J&T are similarly strengthening their market positions. These companies are improving per-parcel revenue by adjusting package structures and targeting higher-value customers to counterbalance the pressure from increasing proportions of low-priced e-commerce parcels.
However, as market competition intensifies, working conditions for couriers in the fragmented parcel sector have become increasingly challenging. E-commerce platforms continue squeezing profit margins on returns, reducing courier incomes, while companies impose stricter performance metrics on fragmented parcel volumes. Many couriers resort to artificially inflating order numbers to meet targets. Concurrently, the emergence of gray-market brokers offering low-price online collection services further erodes courier earnings.
To effectively address market challenges and maintain industry order, experts recommend that courier companies establish standardized order systems with third-party platforms while maintaining unified market pricing. Regulatory intervention appears crucial to standardize market practices and guide competition toward healthier development. Such measures could help the industry navigate intense competition while facilitating transformation and upgrading, ultimately reducing pressure on couriers and improving their overall compensation.
Looking ahead, the industry calls for reducing cutthroat competition to achieve sustainable development. Stakeholders anticipate that policies from the State Post Bureau will bring positive transformation, steering the courier industry toward more orderly and healthy development.
