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360Buy’s Express Delivery Trucks Ready to Hit the Road After Government Approval

We reported recently on a significant strategic shift in China’s e-commerce industry whereby a number of leading e-tailers wanted to start logistics companies so as to deliver their own products to customers. Now, China’s State Post Bureau has evaluated all their applications and it’s good news for only one of them: 360Buy. It was the only e-commerce site granted a license to expand into the courier industry, thereby dashing the hopes of Vancl, Coo8, and VIPshop. In response to the news, 360Buy’s CEO Liu Qiangdong took to his Weibo account to say that his company’s express delivery service will launch at the end of August. It marks the end of a battle that has actually rumbled on for two whole years when the site – China’s second-largest B2C e-tailer – first applied to expand into logistics. The strategic move being made by some of these sites reflects a desire to crackdown on the weakest link in its chain to customers, the assortment of hundreds of private and state-run courier businesses that deliver billions of dollars worth of items each year. The recently-listed VIPshop (NYSE:VIPS) claims that the company hits a successful delivery rate of just 95 percent with its current logistics partners, and that it needs to up those percentage points in whatever way it can – even if it means a phenomenally expensive shift into a new industry. But the e-commerce market leader in China, Alibaba (with its Taobao and Tmall businesses), is sticking with the current system, and has made no sign of moving into logistics itself.

In total, the State Post Bureau approved 260 licenses for logistics companies in this initial round of audits, with all but one of them being conventional courier firms. The likes of Vancl and other hopefuls might be luckier next time.