KITA News and Reports
  • China’s E-Commerce ‘Evolving’ Smart Delivery Locker Cabinet Business
    2018-11-19

    Chinas E-Commerce Evolving Smart Delivery Locker Cabinet Business

      

    -  Many advantages such as cost-reduction in the stage of delivery and prevention of crimes

    and side - effects -

     

     Recently, the logistics industry in China is increasing the efficiency of electronic commerce by actively utilizing smart delivery locker cabinets.

     

     According to a report titled The Recent Trends in Chinas Smart Delivery Locker Cabinet Market issued by Chengdu branch of the Korea International Trade Association (Chairman, Kim Young-joo), the market value of the courier industry in China reached 495.7 billion yuan as of 2017, displaying  a rapid growth of 24.7 percent year-on-year. In terms of the quantity, it recorded 40.1 billion during the same period and more than 100 million packages are delivered every day. Some predict that if this trend continues, China's parcel delivery volume will increase up to 70 billion every year until 2020.

     

     Smart delivery locker cabinet is a storage box used by courier and recipient to store, receive and send parcels based on the Internet of Things (IoT) and mobile payment system. When a courier scans the parcel and puts it in the locker cabinet, the recipient is sent a certification number corresponding to the one-time password, and the recipient visits the locker cabinet at a convenient time and collects the parcel. When the recipient scans the QR code on his/her smartphone to open the locker cabinet and collects the parcel, the logistics company is notified in real time.

     

     As of 2017, it is estimated that a total of 270,000 smart delivery locker cabinets are installed and operated in China. This is also expected to increase to 1.25 million by 2020 thanks to the rapid growth of the parcel delivery business.

      

     The advantages of the smart delivery locker cabinet are that it can provide 24-hour service, there is no restriction on the time of receipt, and there is no fear of losing parcels. In addition, it is safe from the personal information leakage and the risk of various kinds of crimes as there is no need to meet with the delivery people. The password that is required to collect the item can be checked only on the recipient's smart phone, and the security is very reliable because it is changed every time. It is the troubleshooter that solves a variety of problems that arise at the stage when the goods are finally delivered to customers, so-called last mile, at once.

     

     Most of the smart delivery locker cabinets in China are largely established and operated by the National Postal Service, government-run logistics company, which is responsible for postal services, the logistics companies under Alibaba, and major logistics companies such as S.F. Express, STO Express and ZTO Express. Since the service is funded by the national institution and large companies, the business can be stable but the profitability is low due to low service fee. However, it can be predicted that the number will steadily increase in the future due to the improved business efficiency that cannot be calculated by the profitability of the present moment as well as the nature of the market that the large logistics companies are the service providers and the customers at the same time.

      

     Lee Won-seok, a manager at the Chengdu branch of the Korea International Trade Association, said, "Korea is also in the process of providing unmanned delivery locker cabinets. However, it is still limited as some local governments provide them for women or underprivileged class as a part of welfare service or some apartments install them for themselves. He added, "If Korea make efforts to establish its own profit-making model for the delivery locker cabinet business, improve payment convenience, and secure actual installation space, it will be a great help to increase the efficiency of e-commerce."

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