Is China’s express delivery price war over? The answer will lie in profits

China’s drive to stamp out cutthroat competition is starting to stabilize express delivery prices, but uneven earnings raise questions about the recovery’s sustainability

By Lee Shih Ta

Delivering more parcels while earning less from each was once the clearest illustration of the cutthroat competition – known locally as “involution” – plaguing China’s express delivery sector.

China’s express delivery parcel volume rose 13.6% in 2025 to 198.95 billion, while average revenue per parcel fell 6.3% year-on-year to about 7.51 yuan ($1.11). That trend has begun to change this year. Data from the State Post Bureau showed parcel volume rose 5.2% in the first five months of 2026 to 82.87 billion, while revenue increased 7.2% to 635.37 billion yuan. That implies average revenue per parcel edged up about 1.9% to 7.67 yuan. In May alone, revenue grew 9.5%, easily outpacing a 5.7% increase in parcel volume and implying a roughly 3.6% rise in revenue per parcel.

That doesn’t mean express delivery companies have raised prices across the board. The national average is also affected by international shipments, returns, individual customer parcels and changes in product mix. Still, revenue growth once again exceeding parcel-volume growth suggests the industry’s yearslong price decline is beginning to ease.

Last July, the State Post Bureau voiced its opposition to involution-style competition and convened a meeting with express delivery companies, calling for the lawful regulation of destructive low-price competition. Around the same time, the city of Yiwu in Zhejiang province raised its regional minimum price from 1.1 yuan to 1.2 yuan per parcel. Some cities in Guangdong later required e-commerce parcels weighing 0.1 kilograms to be priced at 1.4 yuan or more. While these were regional measures, they provided an important signal in two of China’s largest express delivery hubs.

In January, the State Post Bureau went further by making a crackdown on involution-style competition one of its priorities for the year. It called for stronger oversight at the source, a better balance in the distribution of benefits between company headquarters, their franchisees and their couriers, and the use of transparent regulation to address unreasonable practices such as unequal delivery fees and automatic penalties triggered by customer complaints. This shows the campaign is expanding beyond curbing low prices to cover profit-sharing and operating practices across franchise networks.

In practice, the burden of price wars is often ultimately borne by franchisees and last-mile deliverers. Company headquarters can lower costs through automation, higher parcel volumes and more efficient sorting and transportation, but smaller players cannot reduce rent, labor and delivery expenses at the same pace. If headquarters see their revenue improve while franchisees still rely on cutting delivery fees paid to couriers or imposing heavier fines to stay afloat, the industry cannot truly escape involution.

Easing price pressure

In the first five months of this year, YTO’s (6123.HK; 600233.SH) cumulative revenue per parcel still edged down about 0.8% year-on-year, though that was a big improvement from the 6.2% drop in the same period last year. Revenue per parcel at STO Express (002468.SZ) and Yunda (002120.SZ) rose about 13.4% and 9.4%, respectively, over that time. But STO’s figure was affected by the consolidation of Danniao Logistics into its results, and an increase in higher-priced reverse-logistics business. Yunda’s parcel volume fell about 4.4% over the same period, producing a clearer pattern of lower volume but higher prices.

At ZTO (2057.HK; ZTO.US), the industry leader by parcel volume, first-quarter revenue per parcel from its core express delivery business rose 8.2%, partly due to bigger contributions from its key-account and return parcel businesses. The associated pickup and delivery costs also increased. These figures suggest the yearslong decline in pricing is under control, with some companies improving profit per parcel through changes in product mix, lower costs and recovering margins.

SF Holding’s (6936.HK; 002352.SZ) revenue per parcel also recovered, rising 4.8% year on year to 13.75 yuan for its express logistics business in May. But SF operates mainly through a directly managed network and has a larger proportion of time-definite express and mid- to high-end services. Its revenue per parcel is therefore far higher than that of franchised e-commerce delivery companies, and movements in the figure are more heavily influenced by its product mix and customer demand.

Overall, while parcel pricing has stabilized to varying degrees across the sector, the reasons have differed for each company. Some benefited from an improved product mix, others achieved higher prices alongside falling parcel volumes, while some relied mainly on lower costs to restore margins. This suggests the anti-involution campaign has yet to produce an industrywide profit inflection point, leading investors to wait before revaluing the sector.

Differing company stock performances also point to variable market views on each company’s prospects. STO’s Shenzhen-listed shares have gained about 9.3% so far this year, while YTO and Yunda have risen 4.7% and 1.2%, respectively. ZTO’s Hong Kong shares have gained about 16.9% over the same period, while SF remains in negative territory. YTO’s shares rose by their daily 10% limit on July 1 after the company said its profit rose between 69% and 86% in the first half of this year, showing investors are more focused on whether improved pricing can translate into actual earnings.

The divergence may reflect differences in earnings structure. ZTO relies mainly on China’s franchise-based e-commerce delivery market, meaning a stabilization in parcel pricing and lower unit costs should, in theory, feed more readily into profits and cash flow. SF is larger, but its operations span time-definite express delivery, freight, international logistics and supply-chain services, making the anti-involution campaign only one of many factors affecting its performance. ZTO’s relative share-price strength may therefore reflect a market view that it has a clearer path to improved profits, rather than signaling a broad revaluation of the express delivery industry.

The anti-involution drive can raise the industry’s price floor, but it can’t create competitive barriers for individual companies. As parcel-volume growth slows, companies will still have an incentive to fight each other for existing customers, and price competition could re-emerge through rebates, subsidies and discounts for major clients. China’s express delivery industry will only truly escape the cycle of delivering more while earning less when competition shifts from chasing parcel volume through low prices to differentiating themselves through factors like delivery speed, returns services, supply-chain capabilities and customer mix — and when their franchisees and couriers can also share in the gains.

Lee Shih Ta is an editor at Bamboo Works.

You can contact him at shihtalee@thebambooworks.com

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