Company quarrel delivers message that monopolies distort the market

Updated 2017-06-05 10:35:04 China Daily
An express delivery firms prepars for the busiest season of the year, Jiujiang city, Jiangxi province, Nov 8, 2015.

An express delivery firms prepars for the busiest season of the year, Jiujiang city, Jiangxi province, Nov 8, 2015.

On Thursday, SF Express, the leading domestic delivery company, and Cainiao Network Technology, a company financially backed by Alibaba that provides technological support to delivery companies, shut down their data sharing. As a result, a large number of deliveries were affected. With the intervention of the State Post Bureau, the two resumed their data sharing on Saturday. ThePaper.cn comments:

Both Cainiao and SF Express blamed each other for the shutting down of their data sharing and it is hard to know which was responsible for the quarrel. But one thing is certain: It is Cainiao that first raised the request to SF Express about providing more comprehensive logistics data, ostensibly to detect counterfeit goods. Cainiao also asked the delivery company to transfer the data from the Tencent Cloud storage it currently uses to Alibaba Cloud storage.

Such requests are unreasonable because they are a kind of extortion. SF has the right to choose its own data storage as well as which part of the delivery data it chooses to share. By raising these requests, Cainiao hopes to build a closed service platform from which it can exclude all competitors.

It is Cainiao's monopoly in the collection of logistics data that has given it the confidence to make such a request. Even though Cainiao claimed it "co-works, not competes" with delivery companies, the fact is that Cainiao could get huge quantities of orders from e-commerce platforms under the flag of Alibaba. According to data from Alibaba, the average number of deliveries that go through Cainiao every day is 57 million in 2016, or 71 percent of the total number of express deliveries.

Having a monopoly in the industry, Cainiao has set its own standards for the express companies joining it. Now, with the move against SF Express, it shows it intends to expand its existing monopoly.

The quarrel between the two companies has ended for now, but it sends a warning: When a company becomes a monopoly, it disturbs the normal market order. It is necessary to prevent such monopolies from growing in the future.

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