(Yicai) Aug. 16 -- Chinese couriers have been diversifying into other areas of business lately, such as selling fresh produce and offering storage services, to find new growth drivers as well as to establish a better business ecosystem as intense competition in the express delivery sector squeezes their margins.

Industry giant SF Express has been selling fresh produce, fruit and daily household supplies through its livestreaming channel since July 4. It also provides other services, such as the recycling of old clothes, on the life services section of its app.

ZTO Express is providing storage, transport and dispatch solutions to pharmaceutical firms through a new joint venture that it set up on July 7. It has also bought a majority stake in mobile payment app Wantong Pay, which holds a payment services license.

YTO Express has set up a trading subsidiary which is engaged in online sales, the trade of agricultural products, bonded warehouse operations and other services.

A fierce price war is the reason why delivery companies are turning to other revenue streams. STO Express’ fees tumbled 11.9 percent in June from a year earlier to CNY2.21 (USD0.30) per delivery, while that of Yunda Express slumped 9.7 percent to CNY2.32 and that of YTO Express sank 9.3 percent to CNY2.37. SF Express, which has the highest gross margin, saw its charges for a single delivery fall 2.4 percent to CNY16.42 (USD2.25).

But although these courier firms are all exploring other revenue streams, the new ventures are all rooted in their core business of logistics.

SF Express runs the biggest cold chain business among the delivery companies, Zhao Xiaomin, an express delivery logistics expert, told Yicai. "Through livestreaming they are able to better serve their clients and this helps to increase customer loyalty."

ZTO Express introduced cold chain, drug and payment services last year, Zhao said. By doing so, the Shanghai-based firm hopes to make use of its strengths in the express delivery sector to build an ecosystem that is different from its rivals and to build itself into an all-round logistics group.

Editors: Tang Shihua, Kim Taylor