VIPShop Applies for Courier Services License
21st Century Business Herald, 6/14/12
Tang Yizhi, vice president for logistics and customer service at Chinese B2C brand-name discount site VIPShop.com revealed today that VIPShop has submitted its application for a courier services license to authorities. VIPShop's successful delivery rate with external services like S.F. Express and China Post EMS is only 95% at present, Tang said, making the development of its own courier services a necessary step if it is to increase this figure by another two percentage points.
Tang acknowledged that developing its own courier services would be a risky move for VIPShop, but said the company had little choice. If the company develops its own logistics network on a large scale, costs will increase by 20-30% over costs using third-party courier services, he said - but there is no other way for the company to reach its ideal successful delivery rate.
VIPShop has already begun trial operations of its own courier service in Shanghai, which Tang said had been necessary for the company to acquire enough experience to apply for a courier services permit. Besides increasing the percentage of successful deliveries, VIPShop's in-house courier service also reduced delivery delays by at least a half-day.
VIPShop currently has logistics centers in Guangdong province (Nanhai), Jiangsu province (Kunshan), Sichuan province (Chengdu), and Beijing, Tang said, respectively covering the South, East, Southwest, and North China regions. The South China logistics center is the largest of the company's four facilities with a total 40,000 square meters of floor space; the other three each have 24,000 square meters of space. Warehousing facilities at the South China center currently comprise two warehouses which will be merged and expanded to cover 80,000 square meters after October 2012.
All of VIPShop's current 110,000 square meters of floor space are currently rented, Tang said, adding that the current industry standard costs are between RMB 0.8 and 0.9 per square meter per day. It will cost the company between RMB 1,700 and RMB 2,000 per square meter to build its own facilities, plus an additional land usage cost of roughly RMB 500 per square meter for a total per-square meter cost of RMB 2,200 to RMB 2,500.
Editor's Note: For more information on this topic, please see "B2C VIPShop Opens Chengdu Logistics Center," MD 11/15/11 issue.
Keywords: Internet B2C logistics Vipshop e-commerce
Sending
