Global online consumers are buying more products from China in 2015 and Chinese consumers are order more frequently from oversea sites. This trend creates a growing opportunity for companies helping e-retailers deliver products to overseas consumers.
China Post Group Corp., China’s postal service provider that claims to ship 60% of the parcels destined for abroad, reports that it shipped 700 million parcels out of China in 2015, representing 70% growth from 2014. Parcels shipped through ePacket, a service China Post established in 2010 specifically to handle online orders, increased 90% in 2015 compared with a year earlier, according to the State Post Bureau of China.
Parcels shipped via ePacket are limited to 2 kilograms in weight, or 4.4 pounds. Chinese companies that use ePacket ship a parcel via China Post, which flies it to the United States where the U.S. Postal Service handles final delivery. The total shipping cost is only about $5, and the agreement has drawn fire from U.S. online merchants who say the USPS shouldn’t be helping Chinese companies undermine their web sales.
Chinese e-commerce giant Alibaba Group says about 70% of orders placed on AliExpress.com, an online shopping portal that enables Chinese companies to sell online to shoppers around the world, are shipped via ePacket. AliExpress.com drew 9.8 million unique visitors in November 2015 versus 7.8 million a year earlier, according to web measurement service Compete.com. The median for retailers in the Internet Retailer 2015 Top 500 Guide was an average of 1.3 million monthly unique visitors in 2014.
USPS said in a recent report that its ePacket business with China business grew in 2015 and is profitable.
China Post and USPS didn’t disclose how many parcels they processed between China and the United States, but China Post says it manages 109 freight flights every week between China and the U.S., representing about 20% of its 551 global flights.
EPacket allows Chinese e-retailers to deliver small parcels faster than the basic parcel service offered by China Post. However, ePacket is slower and less expensive than express services offered by such international parcel carriers as UPS, FedEx and DHL.
China Post’s major ePacket destinations are the U.S., Australia, the United Kingdom, Canada, France and Russia. EPacket has become a recommend shipping option on major e-commerce marketplaces, including Alibaba, Amazon and eBay.
Besides the state-run post offices, some U.S.-based private shipping companies are doing a growing business in helping e-retailers ship from China to the U.S.
“The numbers of parcels we delivered from China to U.S doubled every year recently,” Nike Chan, marketing manager of International Bridge Inc., tells Internet Retailer, “Compared with ePacket, our service is faster and more expensive. We deliver parcels from China to the U.S. in three to seven days.”
All of International Bridge’s clients in China are e-retailers, and most sell apparel and electronics for about $30 per item on average. Chan says company e-commerce sites generate 60% of its orders and the rest come from major marketplaces such as Amazon and eBay.
“In a month during a busy season we normally process about 60,000 parcels that ship from China to the U.S,” Chan says, “China’s low-priced products are still lucrative for many U.S. consumers. For example, a normal T-shirt is about $10 in the U.S. market, but it is very easy to find a similar product selling at $5 in China.”
International Bridge also plans to launch a shipping service from the U.S. to China in the next several months as there is a strong demand from Chinese consumers for U.S. premium goods, Chan says.
For a fuller report on the openings for foreign companies to sell online in China, see “Open Door Policy” in the November 2015 issue of Internet Retailer magazine.