(Yicai Global) April 21 -- China's Big Four logistics companies each dropped the price of a single delivery by more than 10 percent in March from the same period last year as they fight for market share, online news outlet The Paper reported today.

STO Express gave way the most, with a 27 percent year on year reduction in parcel fares to an average of CNY2.25 (USD0.30) per delivery. YTO Express, SF Holding and Yunda Express all cut prices by between 11 percent and 13 percent.

The tactic drives up orders, and Shanghai-based STO Express had a 61 percent leap in business that month from a year earlier and delivered 907 million packages. Its three rivals also saw their business volume increase in correlation with the decline in revenue.

However, no matter how sharp the price cut is, the market share increases remain modest, the report said, citing Zhao Xiaomin, deputy director of the Shanghai Municipal Transportation Commission's special committee on postal express.

Should discounts continue, the courier firms could run out of cash, which will lead to bankruptcy, salary arrears and a backlog of parcels, he added.

The price war in the express delivery sector is fiercer than expected, Essence Securities said. While still generally under control, should it rage further, it will erode company profits.

At the moment, the competition between couriers is focused on prices, but it may expand to other aspects, such as operational network structure, transportation capacity, teams, services and capital reserves, Zhao said.

Editor: Kim Taylor