Summary of Conference Call on Express Delivery Industry Industry Overview - The express delivery industry has maintained relatively stable prices since 2025, with the price for 500 grams in North China at approximately 1.25 yuan, a year-on-year decrease of 0.05 yuan due to reduced income for front-end franchisees [1][3][5] - The cost structure in North China limits further price declines, particularly in Hebei, a late grain-producing area [1][3] Key Points and Arguments - **Price Stability and Adjustments**: - The express delivery prices have remained stable in 2025, with minor fluctuations. The average price for 500 grams is around 1.25 yuan, down 0.05 yuan from the previous year [1][3][11] - Price increases in North China typically occur in mid-September, with actual increases implemented in October, averaging around 0.20 yuan [1][5][6] - Companies must be cautious in price adjustments to avoid customer loss, balancing between competitive pricing and maintaining market share [1][7] - **Impact of Headquarters Costs on Pricing**: - Headquarters' cost increases do not always translate directly to end-user prices. For instance, a 0.10 yuan increase in headquarters' costs may result in only a 0.02 to 0.03 yuan increase for customers [4][6] - Franchisees often absorb part of the cost increases to remain competitive, typically taking on 0.06 to 0.07 yuan of the loss [4][6] - **Franchisee Income and Market Dynamics**: - The decline in income for front-end franchisees has contributed to the overall price decrease in the industry. Franchisees are pressured to lower prices to maintain market share [5][12] - Franchisees require a profit margin of approximately 0.20 to 0.30 yuan per order to cover losses and achieve profitability [13][14] - **Seasonal and Structural Challenges**: - Franchisees in North China face significant operational pressures, with many reporting losses in the range of 2 to 4 million yuan due to seasonal demand fluctuations and high fixed costs [12][22] - The complexity of product structures and reliance on manual operations hinder cost reduction efforts during off-peak seasons [22][23] Additional Important Insights - **Role of "Yellow Cattle" (Resellers)**: - Resellers play a significant role in the express delivery market by offering lower prices to attract business, with some companies relying heavily on them while others focus on direct customer service [15][16] - The price offered to resellers is typically lower than that for direct customers, impacting overall profitability [16][17] - **Regulatory Environment and Coordination**: - Price adjustments in regions like Guangdong are coordinated under the guidance of regulatory bodies, which may influence similar actions in North China [10][20] - The potential for price increases in North China is contingent on the success of price adjustments in Guangdong and the establishment of a nationwide regulatory framework [20] - **Profit Distribution and Cost Management**: - In North China, well-managed franchisees may retain around 0.10 yuan per package after costs, while poorly managed ones face penalties that erode profit margins [21] - The need for fixed costs during off-peak seasons, such as labor and facility expenses, exacerbates financial challenges for franchisees [24]

Core Viewpoint - The express delivery industry is experiencing a new round of price increases amid efforts to combat "involution" and low-price competition, with Guangdong province raising the base price to 1.4 yuan per ticket starting August 4 [1][2]. Group 1: Price Adjustments - Starting August 4, the base price for express delivery in Guangdong province has been raised by 0.4 yuan per ticket, bringing the average price to over 1.4 yuan [1]. - Major express companies, including the "Tongda system," have begun implementing price increases, particularly for 0.1 kg special items, with increases ranging from 0.4 to 0.5 yuan [1][3]. - The price adjustments are a response to the ongoing decline in single-ticket prices, which had fallen below 2 yuan for some companies in the second quarter of this year [1][8]. Group 2: Industry Context - The express delivery industry has been trapped in a cycle of "low-price for volume" competition, leading to reduced profit margins for delivery personnel and poor service quality [3][4]. - The central government has emphasized the need to regulate low-price competition and improve product quality, with recent meetings highlighting the importance of maintaining a healthy market order [2][6]. - The express delivery sector has seen significant price drops, with some areas reporting ticket prices as low as 0.8 yuan, prompting calls for a shift from price wars to quality-focused competition [4][8]. Group 3: Regulatory Environment - Regulatory bodies have previously intervened to address low-price competition, with measures introduced in 2021 aimed at protecting the rights of delivery personnel and stabilizing prices [6][7]. - The National Postal Administration has reiterated its commitment to combating "involution" and ensuring fair competition within the industry [8]. - The recent price increases may signal a shift towards more stable pricing, as regulatory efforts continue to discourage unsustainable pricing practices [8].