'Double Eleven' test for courier firms

And the third factor is the increase in courier companies' investment to improve their infrastructure and technology in order to promote innovation. New trading platforms such as Weixin, the twitter-like micro-blogging service, and mobile apps have been explored, new delivery modes such as intellective express mailbox and convenience store delivery promoted, and regional-scale delivery services expanded.

Still, the express delivery industry has some drawbacks that are restricting its further development. The price war among companies has drastically lowered the profit rate in the industry, from an average of 30 percent in 2003 to 5 percent in 2013. The average price of delivering a package in 2007 was 27 yuan, which fell to 16 yuan in 2013 - and 15 yuan in the first half of 2014.

Another drawback is the lack of guarantee of service quality. For example, to deliver the mails and packages during the "Double Eleven" period, express delivery companies have hired 200,000 new people, but these "temporary" recruits won't have the time to receive proper training to perform efficiently and effectively.

Besides, because of their over-reliance on e-commerce - which accounts for 70 percent of their overall business - express delivery companies are placed in an inferior position in the industrial chain.

Also, employees of courier companies lack the sense of belonging, because the industry can hardly give them a feeling of importance. As a result, a large number of people working in the industry quit their jobs every year.

And express delivery companies lack effective management and supervision in terms of service. Many media reports have said that prohibited items are being delivered because of lack of proper supervision. This is one of the greatest challenges that express delivery companies face in guaranteeing that only secure and safe items will be delivered, especially during special occasions such as the "Double Eleven Day".

The express delivery companies in China should, therefore, take concerted measures to transform from a "big" to a "strong" industry, for which they will also need policy support and the cooperation of other sectors. This has to be done sooner than later because in the long run they have to compete with global courier giants such as FedEx and DHL.

The author is a senior analyst of Sootoo Research Institute.