Image source: Visual China
In the optimization and adjustment of fares, China Railway Group has proposed a differentiated discount floating strategy with both rising and falling, which reflects its sensitivity and adaptability to market changes. However, this flexibility also places higher demands on the organization, management, price decisions and service levels of the China Railway Group. With the deepening of market-oriented reform, China Railway Group will face more opportunities and challenges.
Recently, China State Railway Group Co., Ltd. (hereinafter referred to as China Railway Group) announced that from June 15, 2024, the published fares of EMU trains with a speed of 300 kilometers per hour and above running on the Wuhan-Guangzhou section of the Beijing-Guangzhou high-speed railway, the Shanghai-Kunming high-speed railway, the Shanghai-Kunming high-speed railway, and the Hangzhou-Ningbo section of the Hangzhou-Shenzhen railway will be optimized and adjusted.
This decision has not only attracted widespread social attention, but also stimulated the public's in-depth thinking about the market-oriented reform of railway transport services. From the perspective of market-oriented strategy and customer value creation, we will discuss how China Railway Group can seek sustainable competitive advantages in the new market environment.
First of all, it should be noted that, according to Article 25 of the current Railway Law, railway passenger fares can be guided or set by the government, and market-regulated prices can also be implemented in competitive fields. This legal framework provides policy support for the market-oriented reform of rail transport services. It is in this context that the fare optimization and adjustment of China Railway Group is a positive response to market changes.
Secondly, in a market economy, a customer-centric strategy is the key to a competitive advantage. As a provider of railway transportation services, China Railway Group faces competition from various modes of transportation such as road and air. In this competitive environment, how to implement the customer-centric market strategy and continue to create value for customers has become an important issue.
At the heart of a customer-centric strategy is understanding and satisfying customer needs. China Railway Group needs to identify the target customer groups, deeply analyze the problems faced by customers, and explore how to better meet these needs. At the same time, in order to outperform its competitors, China Railway Group also needs to improve at the management and organizational level to enhance customer satisfaction and loyalty.
From the perspective of us as customers, we can perceive the market operation ability of China Railway through our own actual experience. Of course, what we very little want to see is to emphasize the laws of the market when we are ready to raise prices and reduce customer service, and when it comes to market operating norms and customer experience, we emphasize some non-market factors.
Finally, the flexibility of market pricing strategy is an important means for enterprises to cope with market competition. In the optimization and adjustment of fares, China Railway Group has proposed a differentiated discount floating strategy with both rising and falling, which reflects its sensitivity and adaptability to market changes. However, this flexibility also places higher demands on the organization, management, price decisions and service levels of the China Railway Group.
In response to the questions related to the price adjustment, the person in charge of the relevant railway transport enterprises said that the area where the high-speed rail line involved in the fare optimization and adjustment is located, and the competition of various modes of transportation is sufficient, and the EMU train fare optimization and adjustment still has a greater cost-effective advantage than other modes of transportation. Railway transport enterprises will comprehensively consider the changes in passenger flow, market demand and passenger acceptance, and make good use of the flexible discount, high-speed rail EMU train fare mechanism with ups and downs, so as to meet the diversified travel needs of passengers to the greatest extent.
It is worth mentioning that there are only 6 profitable high-speed rail lines in the country, and all of them are distributed in the Yangtze River Delta, Pearl River Delta and other economically rich coastal areas. For more high-speed railways built in the central and western regions, it will take time to recover the high construction costs. On April 30 this year, the 2023 financial accounts released by China Railway Group showed that the group achieved operating income of 1,245.4 billion yuan, a year-on-year increase of 10.5%, and a net profit of 3.3 billion yuan. For comparison, as of December 31, 2023, China Railway Group had a debt of 6.13 trillion yuan.
Looking forward to the future, with the deepening of market-oriented reform, China Railway Group will face more opportunities and challenges. The optimization and adjustment of fares of China Railway Group is an important step in the market-oriented reform of railway transportation services, which can not only better adapt to market changes, but also create more value for customers. However, the road of market-oriented reform is still full of challenges, because it not only involves the adjustment of prices, but also involves the overall improvement of service content and service levels. China Railway Group should take advantage of this fare adjustment to further optimize its organizational structure and improve operational efficiency, so as to better meet the requirements of market-oriented reform, become a more respected and responsible state-owned enterprise, and gain greater advantages in the fierce market competition. (Fortune Chinese Network)
Editor: Liu Lanxiang
The author, Wang Lei, is a columnist for Fortune Chinese and a senior market strategy consultant. This content is the author's independent view and does not represent the position of Fortune Chinese. May not be reproduced without permission.
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