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China Self Pickup Cabinet Market

14Jun

On June 6th, China leading logistic companies, like Shunfeng, Shentong, Zhongtong, etc., invested 500 million yuan to develop the Self Pickup Cabinets (SPC), which is a platform for all logistic and e-commerce companies. The size of the logistic market in China has exceeded 140 million yuan in 2013, and the estimated size of the SPC relative market is approximately 27 billion, showing enormous development potential.

One of the leading e-commerce companies Jingdong has currently built more than one thousand cabinets over 37 cities in China. Shentong has announced that they will invest 30 million yuan in SPC, especially in schools and communities. Other express companies like Shunfeng, Yuantong, Zhongtong have been following as well. Even so, unlike being a common infrastructure in developed countries, the SPC does not go the same in China for some reasons. The development and deployment of SPC are related not only to e-commerce or logistic companies, but also to government, customers, SPC suppliers, operators, communities and convenience stores.

1. SPC can satisfy some customers, like college students, people travel out of town often, or those who simply don't have time to sign the packages up. But not all customers have the need or necessity of SPC. Many people still appreciate doorstep delivery service. There are also many different issues to solve when planning and deploying SPC in campus, countries, towns and cities.

2. SPC requires large amount of investment. For a project of ten thousand SPC spots, it requires about 300 to 600 million yuan as direct investment, which does not include any utility fee, operating cost or technology investment. While the capabilities of the logistic companies are limited. Furthermore, China still holding the demographic bonus, there are other cheaper options for "the last mile" solution, like labor delivery.

3. There are some shop-cooperating modes can work as a substitute of SPC. In some communities, the property management can sign the packages for customers. But the good side is, SPC can cooperate with them to relief their workload, meanwhile create rentals for properties. Similarly, SPC can also create profit for the convenience stores that distributed all over communities. There are already more than ten thousand cooperating points all over the nation, and the number still increasing.

4. In August 2013, the National Post Bureau published two regulations for the SPC related field to establish the industry standard. And in an official seminar, the government declares that the SPC industry is still in trial period and should not be pushing. Which means the government will not stimulate SPC development in short time. But it is noted that, some nation-owned companies is leading the investment of SPC. For example, the SPC deployment has become the No.1 project of Shanghai Post office in 2014. There are also concerns that the government is competing against private companies in this field.

To sum up, the SPC market in China has huge potential but with some uncertainty, like commercial environment, business mode and policies, etc.

 

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