Behind The Rising Price Of "Luo Sheng Men": Why Is The "Accessibility" Difficult To Get Rid Of The "Price Resonance"?

Recently, the "Tongda" express company staged a price increase "Luo Sheng men": from May 8th and 9, prices were gradually announced, and then revised or revoked related announcements. Why is the "Tongda" express company adjusting its price and adjusting its price?

Twenty-first Century economic news reporter learned that the price of the "Tongda" express company is not directly aimed at the C end consumers. Therefore, in twenty-first Century, the economic report reporters interviewed all the express company outlets, and the responses were "at the same time, the price remains unchanged, and no notice of price rise."

But "Tongda" express company collective price increases and "change" behavior, but reflects the company's price changes in the embrace of the phenomenon. Even some express companies were interviewed by regulators on suspicion of "synergistic rise in prices".

Yang Daqing, a special researcher of China logistics society, described this phenomenon as "price resonance". He told the twenty-first Century business news reporter that the resonance of "Tongda" express company in price is a passive choice in the competition of the express market, which reflects that the express company has entered a non benign competition.

Repeatedly trapped "collaborative price rise" questioned

On the eve of peak season or electricity supplier, courier companies often become the protagonists. Due to the rapid increase in the number of Express items, the shortage of vehicles, materials and personnel caused additional costs. The express company has a strong desire to fill costs and increase revenue through short-term price increases.

However, once the price rises, the "Tongda" express company will be pushed to public opinion.

On the eve of the "double eleven" in 2019, the "Tongda" express company paid attention to the collective announcement of the price increase.

In October 11th last year, China Express delivered the first notice of price increase, saying that "express fees will be adjusted from November 11, 2019." Four days later, Yuantong Express also announced that it would adjust the express charge from November 11, 2019.

Although the twenty-first Century economic report reporter failed to get a notice of price rise from rhyme shares, STO and Baishi Express's official website, a public report implied that the three express companies might also follow up the price increase.

According to the Southern Metropolis Daily, in November 6, 2019, the Zhejiang provincial market supervision bureau held a warning on suspected monopoly behavior of the express delivery industry in the province, and informed some of the illegal monopolistic activities such as cooperative price hikes, limited transactions and so on. Among them, the "four links and one Da" five express company brand was named due to a substantial increase in price.

Under the multiple factors, the "Tongda" express company showed a weak bargaining power on the express price.

On the one hand, over the past ten years, the single ticket income of China's express delivery industry has been declining, reflecting the trend of continuous downward trend in express prices, and this trend is hard to reverse; on the other hand, the price of "join" express companies has always been at the critical cost point, and is facing stronger buyer's market pressure.

According to the statistics of the State Post Office, from 2010 to 2019, the price of single ticket in China's express delivery industry Twenty-four point six Yuan down Eleven point eight Yuan, a drop of 52%. Among them, the single ticket income of "Tongda" express company is lower than the average level of the industry. Taking the data of various companies in 2019 as an example, China Unicom express, rhyme shares, Yuantong express, STO and Baishi express last year's single vote income were respectively One point seven two Yuan, Three point one nine Yuan, Three point zero one Yuan, Three point one one Yuan, Two point eight eight Yuan.

In the early years, the "Tongda" fought a "price war" to compete for the electricity market share. Under the growth of the wilderness, the various express companies formed scale effects and built cost barriers, but they also lowered the price of the electricity supplier's express.

Such a price state makes the "Tongda" express company with electricity supplier as the main business source passive. If the price increases, the price sensitivity of the electricity supplier express market is stronger, and it will easily lead to customer churn; if it does not increase, the accumulated cost pressures can cause the express company to collectively "bleed".

In Yang Daqing's view, "Tongda" express company has a certain demand for price rise.

"The price adjustment of express companies is driven by long-term development." He pointed out that the current "Express Department" express enterprises are facing three phases of overlay effect: first, the service upgrade period; the franchising express enterprises need to change the cheap express labels and promote the service upgrading, which will inevitably bring about changes in the cost and price adjustment; two, the development of road changing period, digitalization reshape the entire express logistics market, and the increase of the cost of science and technology urgently requires the express enterprises to adjust prices and increase profits. The three is the crisis at the grass-roots level. With the increase of land, manpower, packaging and other comprehensive costs in recent years, the grass-roots units of franchising express enterprises are generally faced with incrementally increasing income or even negative profit growth. Changing the level of ecological anemia at the grass-roots level needs the adjustment of service prices.

However, the "Tongda" express company, which has not yet formed the same origin and service differentiation, is also sensitive to price fluctuations. The price adjustment of a family will inevitably stir up waves among the others.

"The price adjustment of each household is controlled by the balance of power, not too high, but there will be some follow ups." Yang Daqing told the twenty-first Century economic news reporter that although China's express industry has been ranked first in the world in terms of volume of business for many years, the profit rate of domestic express companies is still quite different from that of FedEx, UPS and other international giants. The reason is that the "price war" which is difficult to reverse in China's courier market is not conducive to China's development from a major express power to a courier power.

It is worth mentioning that the "Tongda" express company is currently unable to build a pricing mechanism based on its own service quality and market industry. Therefore, this kind of price adjustment with tacit understanding is easy to fall into the question of "cooperative price rise" or "collusion in price rise".

Changing the status quo is not easy.

Today's low price situation, "Tongda" express company's past unfair competition mode is an important reason. If we want to change this situation and make the price of the express market return to rational competition, we need the emergence of differentiated services.

Yang Daqing told the twenty-first Century business news reporter that the rational competition of express price has the characteristics of structural differentiation, that is, high quality service to specific price, middle and low end service to ordinary price. This will not only satisfy the overall low price demand, but also solve the upgrading needs of high quality development.

In fact, the changes in the current express industry also remind express companies that they can no longer rely on the "price war". On the one hand, the concentration of China's express industry continues to improve, and the scale effect of leading enterprises is weakened. On the other hand, the relationship between the headquarters of the express company and its affiliates is delicate. Considering the profit point of view, the franchisees of all outlets have no ability to actively reduce prices on a large scale.

The transfer of pressure to terminal consumers through price adjustment will bring the risk of customer churn.

So, including the "Express Department" express company, in recent years, the strategy of "brand remolding" and "product layering" has entered the eyes of major express companies.

A reality is that the "Tongda" express company is ushering in the direct impact of the strong enemy SF holdings.

In the past, SF Holdings has grown in their respective tracks because of their different product positioning with the "Tongda" express company. Based on its excellent service, the SF holding company, which is located in the middle and high-end parts, has won the reputation of consumers, and has also gained a higher bargaining power. However, due to the macroeconomic impact and the "access Department" squeezing the share of e-commerce express, SF Holdings has been stagnant in recent years.

In 2019, SF holdings adjusted its product strategy, launched special preferential products for the market and customers of the electricity supplier market, and quickly "harvested" parts of the electricity supplier. As far as the result is concerned, the contention of SF holdings relies on low price electricity suppliers to boost market share. This low price based on quality service is a "deep water bomb" for the "Express Department" express company.

The intervention of SF Holdings has brought pressure to the brand and service of the "Tongda" express company. This requires that the "Tongda" express company not only create cost barriers, but also differentiate customers and products as soon as possible, so as to form differentiated services.

In fact, under the transformation trend of the "express logistics integrated service providers" of various companies, the "Tongda" express company has begun to build the difference from the product level.

First of all, in terms of product layering, the "Tongda" express company introduced multi-level products. Products such as rhyme shares include "Da Da", "the next day", "rhyme express" and so on, to distinguish different customer groups. Secondly, in terms of product categories, "Tongda" express company and other involved in the field of express transportation, in order to build diversified logistics business.

A brokerage analyst told the twenty-first Century business news reporter that although the "Express Department" express company depends on cost control, it is more likely to be accepted by the market if its service is better and the time is more stable.

"This is also the reason why Shun Feng has acquired the market share quickly after the introduction of special products." The person further said that with the diversification of demand, the positioning of the current express company products will inevitably be different, the trend of product layering is inevitable.

However, for the "Express Department" express company, the construction of differentiated services still needs a process. This indicates that it will continue to appear around the price in the short term.