Jieyang, the small town sending out millions of parcels

By ZHANG Xilong

Jieyang is a third-tier city about 400 kilometers east of Guangzhou, the capital city of Guangdong Province. Among 21 cities in the province, Jieyang’s GDP last year ranked 13th with 226 billion yuan (US$33 billion). It was the only city to record a decline in GDP.

But when it comes to the express business, more than 3.7 billion packages were dispatched from Jieyang last year, more than Hangzhou where Alibaba and NetEase are headquartered and fourth nationally behind Yiwu, Guangzhou and Shenzhen.

Rise and further rise of Jieyang

Express deliveries are said to reflect the vitality of local businesses. Jieyang is known for garments and metals. Both declined last year and e-commerce became the only game in town. With 20 million packages a day, e-commerce turnover reached 90 billion yuan last year.

Before 2014, Jieyang did not feature in express delivery statistics. But by 2016 it was 18th and made the top ten in 2019.

While industrial growth slowed by 17 percent last year, income from deliveries rose 10 percent to 18 billion yuan.

Puning is a small town in Jieyang and home to hundreds of thousands of family enterprises. More than 500,000 e-commerce businesses operate in the town of 2 million.

CHEN Hao started his pajama business in 2020. He hired a team to do live stream sessions and customer service.

“The local supply chain is quite mature, I can find materials and have them processed in local workshops,” said Chen.

While it is easy to start an e-commerce business here, the margin is low. Chen sends off 500 packages every day, pays for delivery fees, and up to 15 percent of the packages will be returned for various reasons. He has to pay the return fees too.

Out-dated customs

Jieyang, especially Puning, has become the center of an express price war because of the large demands. Local businessmen have little say in it. While its volume ranked fourth, Jieyang only ranked ninth in profit of the delivery business. Shanghai was top.

Shanghai ranked seventh in package volume, but with many offices of overseas companies, a good number of its deliveries were sent overseas, which is more profitable. Among Jieyang’s 3.7 billion packages, only 100,000 went overseas.

Low efficiency of local customs was a key issue. A local businessman said he’d rather go to Ningbo thousands of kilometers away for custom clearance. It is cheaper, but moreover, it is efficient.

Copyright wrongs

The industries that support Jieyang’s express business are also the reason why Jieyang’s economy is growing so slowly. Most clothing “brands” in Jieyang have no designer whatsoever.

“We copy all popular designs, you make some minor changes to avoid lawsuits of course,” Chen said. “Others do so as well.”