The booming Chinese courier, express and parcel (CEP) market will outgrow Europe’s largest market, Germany, within fi ve years if it maintains its current dynamic growth rates. The world’s four leading express players, DHL, FedEx, TNT and UPS, look set to win signifi cant market share from Chinese operators by expanding their domestic services. In response, Chinese players are trying to strengthen their fi nancial basis and enhance their services. Those are the key fi ndings of a new “CEP Market Fact Sheet China” from Hamburg-based market researchorganisation, CEP-Research.
The Chinese CEP market has soared with average annual growth rates of about 25 percent in recent years, nearly quadrupling in value from about EUR 1 billion in 2000 to over EUR 3.8 billionin 2006, according to CEP.
Demand has been driven by economic liberalisation, a surge in foreign trade and the emergence of a strong domestic consumer market. Looking ahead, growth rates in the 25 percent- 30 percent range are expected for the next few years, taking the market to over EUR 12.5 billion in 2011, CEP-Research forecasts. This would make China bigger than Germany, France and UK, the three largest express and parcel marketsin Europe.
“These fi gures demonstrate what a key role China will play in the worldwide express and parcels industry in future. CEP companies in Europe and overseas who do not yet have a clear China strategy, risk missing out on excellent growth opportunities,” said Mark Winkelmann, managing director of consultancy ITA Logistics, the CEP-Research parentcompany.
The CEP Market Fact Sheet China also contains detailed financial and market share fi gures as well as profi les of the main players in the Chinese market. The Fact Sheet shows that the domestic market remains highly fragmented, with a clear leader (China Post), several medium-sized nationwide competitors and a multitude of regional or localoperators.
The highly competitive international market is essentially split between DHLSinotrans, FedEx, China Post, UPS and TNT. The “Big 4” integrators are all investing strongly in China through acquisitions, network infrastructure (including new regional air hubs) and new services at present. “The domestic market is much bigger than the international market and that is where the action will be over the next few years,”
Winkelmann commented. “The integrators are investing heavily in domestic services and we expect them to continue acquiring companies to build up their market share. Chinese companies now face the challenge of developing strategies to defend their market positions.”