Express Industry Growth Slows, Profits Under Pressure

2025 parcel volume grew ~12% YoY but per-parcel revenue kept declining. Average per-parcel profit fell below 0.15 RMB; price war remains the primary competition strategy.

New VAT Regulation for Express Services

MOF/SAT 2025 No.5: Express service revenue uniformly taxed at 6% VAT as "collection & delivery services," eliminating previous ambiguity in tax rate classification.

J&T International Expansion Surges

J&T leverages Southeast Asia network to boost domestic business. 2025 international parcel volume grew 200%+ YoY, becoming a new growth engine.

⚠️ Declining Per-parcel Revenue, Profitability Challenges

Price wars drive per-parcel revenue down while labor and fuel costs remain rigid. Express companies face gross margins below 10%; last-mile depots struggle.

⚠️ Business-Finance Data Disconnect

Express companies have disconnected operational systems (sorting, routing, last-mile) and financial systems. Cannot track per-parcel cost/profit in real-time; management decisions lag.

⚠️ Franchisee Financial Control Difficulties

Franchise-based express companies lack effective financial data control over last-mile depots. Revenue recognition, cost allocation, and tax compliance issues are prominent.

❓ How to achieve per-parcel cost precision accounting?

✅ Adopt Activity-Based Costing (ABC). Break down cost drivers into transport, sorting, delivery, and management. Build standard cost models and compare actual vs. standard monthly.

❓ What is the financial impact of the new VAT regulation?

✅ Unified 6% rate simplifies tax processing, but note: collection/delivery (6%) vs. transport (9%) have different rates. Mixed business requires accurate revenue allocation.