Jack Ma, the founder of Alibaba Group Holding Ltd., said several years ago he wanted Chinese consumers to receive online orders within 24 hours. His dream seems closer to reality as an explosion in e-commerce quickly transforms China’s shipping sector.

On average, consumers throughout China received their parcels in 2.6 days in 2015, 14% faster than they did a year ago. In densely populated areas like China’s eastern coastal cities, the average is less than two days, according to the “China Smart Logistics Report” jointly released by Alibaba’s logistic affiliate, Zhejiang Cainiao Supply Chain Management Co., and Chinese research firm CBN data.  Consumers in Shanghai receive their online orders most quickly, in only 1.7 days, the report finds. 

“China delivered 20.6 billion parcels in 2015. We estimates more than 80% of them come from e-commerce orders, and the volume of e-commerce parcels grew 40% in the last year.” Wang Wen, Cainiao’s chief technology officer, told a press conference.

The report also finds that 87.3% of parcels were sent to consumers who received free shipping. 89.4% of parcels delivered to China’s central region –shipped free, as consumers in that area often exceed the threshold to avoid shipping costs, the report says.   

Cross-border shipping times also improved. Chinese consumers’ wait time for packages shipped from overseas fell by one-third in 2015 compared with 2014. The report did not say how many days it took for the average cross-border package to arrive.

Shipments to China’s villages surged in 2015. Parcels delivered to villages accounted for 25% of the shipping volume in China, while the number of parcels increased more than 50% in such under-developed areas as the western and southern provinces, the report said.

E-commerce development and improvements in delivery efficiencies often go hand in hand as shipping companies tend to invest in fast-growing areas, according to the report.

Chinese logistics companies also have deployed new technology to improve e-commerce shippingoperations. Cainiao, a data-sharing network that helps logistics companies process 70% of parcels shipped in China, says it has started to use robots in some warehouses to sort products.

Also, Cainiao this week announced that consumers on Alibaba’s Taobao.com, China’s largest online shopping portal, can cancel their orders when the products are in transit. Consumers who cancel their orders before they are delivered will receive their refund more quickly, the company says. In some test cases, shoppers received refunds in 19 hours instead of 73 hours, Cainiao says.

As package volume grows, so does the number of workers in the e-commerce logistics sector. There are 2.03 million Chinese workers in such jobs, up 340% from 5 years ago, and 60% of them are delivery workers.

In China, the shipping cost for a typical domestic parcel that arrives in 2.6 days is about 15 yuan (US$2.30).

(Source: internetretailer.com  Author: FRANK TONG)