Standoff over data may delay parcels

Updated 2017-06-03 09:54:00 China Daily

The pursuit of lucrative customer data has put the nation's top courier and largest logistics network on a collision course, potentially delaying tens of thousands of parcel deliveries in the short term, according to industry experts.

The standoff came as express delivery companies and internet firms upped the ante for data tracking and analysis capabilities to vie for a bigger share of the country's courier market.

The shutdown of data sharing and connection since Thursday between SF Express and Cainiao Network Technology, in which e-commerce giant Alibaba holds a 48 percent stake, has hindered parcel tracking by SF via Tmall and Taobao, popular shopping sites run by Alibaba.

"We've received massive inquiries from worried merchants and consumers ... We have to suggest that vendors choose alternative delivery services," Cainiao said in a statement emailed to China Daily.

Noting that the conflict has affected shipments of fresh produce including lychees and mangoes, the State Post Bureau has called on express delivery providers to resolve their differences to avoid throwing the market into disarray.

"After coordination with both parties, the bureau has urged companies to embrace 'big picture-thinking', maintain market order and protect consumer rights," a statement issued by the bureau on Thursday said.

The split between the two surfaced on Thursday over the control of customer information generated through Alibaba's e-commerce sites. SF refused to provide data that Cainiao required for detecting shipments of counterfeit goods, saying such a request went beyond normal business purposes and might breach customer privacy.

Tong Yun, chief designer of an apparel store on Taobao, said the clash over delivery had complicated the parcel tracking process and might discourage buyers who pay extra for SF's punctual and reliable service.

The disconnection would put the interests of SF clients at stake for now, due to temporary delays for parcel arrivals and online payment via Alibaba's Alipay, according to a senior industry source who works closely with courier companies and requested anonymity.

"But in the long term, Cainiao would lose track of higher-end customers who are willing to pay a premium for SF's services, putting Cainiao at a disadvantage," the source said.

China's smart logistics market is projected to grow fivefold to 1 trillion yuan (7 billion) by 2025, according to estimates by the China Federation of Logistics and Purchasing.

It's a battle for data, with major players contending to use big data to lower costs and predict demands across the logistics chain, said Xu Yong, analyst at China Express and Logistics Consulting.

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