Chinese delivery company builds up fleet in Europe

Employees of STO Express categorize packages in Beijing. ZHU XINGXIN / CHINA DAILY

By using their own trucks and planes, they can cut prices and take on global rivals

STO Express became the first major Chinese delivery firm to set up its own dedicated fleet of planes and trucks for deliveries across Europe, with the first flight landing in Prague on Wednesday.

The company says it wants to grab a quarter of the China-related market share from big global delivery firms like DHL, UPS, TNT and FedEx in the next one or two years, as its fees are only half theirs.

STO Express will now send three cargo flights between Hong Kong and Prague weekly, and its own truck fleet will carry items from Prague to all countries in Europe, including the UK.

"Having our own cargo plane and truck fleet will save costs for customers, reduce delivery times by 3-7 days and we can now provide customers with a complete delivery tracking service," said Wayne Yu, vice-president and operations director of STO Express Europe.

STO's announcement came at a time of booming cross-border e-commerce activities. Chinese research firm iResearch statistics show China's cross-border imports grew from 100 billion yuan ($15 billion) in 2014 to 150 billion yuan last year and are forecast to hit 210 billion yuan this year.

Even more significant is the growth potential. The global cross-border e-commerce market stood at $230 billion in 2014, and is projected to grow to $1 trillion by 2020, according to joint research by Accenture and AliResearch, Alibaba Group's research arm.

Traditionally, cross-border e-commerce logistics is done by Western express delivery firms such as DHL, UPS, TNT and FedEx, but their high cost structure led to the growth of specialist Chinese delivery firms such as Dolphin Supply Chain.

Founded in 2013, Dolphin Supply Chain enjoyed tremendous growth with revenue last year hitting about 150 million yuan, which is about 2 percent of China's overall cross-border import e-commerce market of 7 billion yuan, said David Lee, CEO of Dolphin Supply Chain.