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Mar. 29 (NBD) -- China's leading retailer Suning.com Co., Ltd. (Suning.com) announced that its basic shipping fee will remain at 5 yuan (0.8 U.S. dollars) in the coming 3 years, though several e-commerce giants and delivery companies raised the postage price for packages around last year's Double 11 Shopping Festival.

The user experience is the first priority, and Suning.com can offer the best experience with lower costs, Hou Enlong, president of Suning.com, said on Wednesday.

It is noted that e-commerce titan JD.com raised its delivery fee about one month before Suning.com made its commitment. 

On 14th February, JD.com released its new shipping price system, adjusting delivery fees based on the destination and value of purchased products sold by the retailer itself. 

This sparked strong reactions from consumers and insiders. 

Some analyzed that JD.com's big push into Chinese rural areas led to a rise in its logistics costs. Compared with China's largest online marketplace Taobao's practice of cooperating with other delivery companies, JD.com relies on its self-operated delivery network, spending far more than Taobao on logistics, especially in the rural areas. 

With regard to Suning.com's announcement of remaining the basic shipping fee unchanged, Xu Yong, chief consultant of delivery data provider cecss.com, told NBD that it is reasonable because the size of the company's logistics business is not that big at present and the rising costs could be offset by profits.

Suning.com has established a nationwide warehouse network incorporating 8 national logistics centers, 47 regional logistics centers, 60 parallel warehouses and 4,000 storefront warehouses.

Around October 2017, delivery service providers ZTO Express and Yunda Express announced adjustments on postage prices. As of March 2018, delivery giant SF Express started to charge for home pick-up service in some cities as well.

The service providers ascribed rising prices to the climbing costs of transportation, labor and raw materials.

The surging prices led to falling profits. According to data from the financial service provider China International Capital Corporation Limited, the gross profit rate of the express delivery industry has dropped to 5 percent from 30 percent in 2007 due to the fierce competition.

Insiders noted that the adjustment of express charges depends on whether the company could make profits. It is reasonable no matter what decisions they make, said Xu Yong. Previously, the intensified competition caused unreasonable delivery prices, but with the listing of these express companies, they become more sensitive about profits, making them more inclined to raise shipping price, Xu added.

Xu also predicted that under the pressure of increased inflation, employment and recruitment difficulties, the shipping prices will slightly rise this year, probably by 10-20 percent at some companies.

Email: zhanglingxiao@nbd.com.cn