(Yicai Global) Oct. 25 -- Chinese courier firm STO Express Co. [SHE:002468] is surveying its franchisees to explore possible opportunities to expand into express delivery services for goods between five and 70 kilograms, Beijing Business Today reported on Oct. 24.
The company only delivers parcels up to 20 kilograms at present, but plans to focus on heavier goods in future.
Courier services for heavier products would mainly target those customer groups dealing with large, business or air parcels, local distribution or e-commerce packages.
STO Express's unit for large parcels would deal directly with retailers on e-commerce platforms, while its local distribution and delivery business will be more suitable for the delivery of medium- and large-sized home appliances.
Expanding in the delivery business will help such companies as STO Express resolve issues related to the profitability of mailing and delivering parcels, one industry insider suggested. With the gradual saturation of the small parcels delivery market, demand is increasing for the distribution of large parcels from the e-commerce sector, he added.
The e-commerce penetration rate for household and key home appliances is currently around 10 percent, but is steadily increasing, data show. The penetration rate for distribution of major home appliances and furniture derived from e-commerce could reach 40 percent and 30 percent, respectively, by 2020.