China Post, Tom team up for e-commerce unit

By Wang Xing (China Daily)
Updated: 2010-08-11 13:28
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BEIJING - China Post on Tuesday formed a partnership with Internet company Tom Group to jointly launch an online shopping website, in an effort to cash in on the nation's booming e-commerce industry.

The new online platform,, will be 51 percent owned by China Post. Tom Group will be the exclusive IT systems provider for the business and will invest an additional 200 million yuan ($29.53 million) to market the new website.

China Post, Tom team up for e-commerce unit
A cyclist passes a China Post mail truck in Shanghai. Kevin Lee / Bloomberg 

China Post is a fully owned company of China's State Post Bureau. It has 46,000 post offices and nearly 36,000 postal savings bank branches.

The new joint venture will inherit 17 aircraft, 50,000 corporate clients, 56,000 postal vehicles, over 150,000 postmen from China Post and help the website in deliveries to customers.

"Our focus is to provide authentic products to our customers and deliver it fast," said Li Guohua, vice-president of China Post.

He said the new service can also be accessed through other channels like mobile phones, customer service hotlines or even over the counter.

The turnover of China's online shopping market reached 111.23 billion yuan in the second quarter of this year, an increase of 97.5 percent over the same period last year, according to figures from domestic research firm iResearch.

Alibaba Group's subsidiary dominates the C2C (consumer-to-consumer) market, with over 80 percent marketshare. In the B2C (business-to-consumer) sector, online electronic shopping website, and Joyo-Amazon are the major players.

Cao Fei, an analyst with the Beijing-based research firm Analysys International, said though China Post has a huge advantage in logistics, the new website is unlikely to have a major impact on the other players.

He said China Post's new website may get some benefits due to its State-owned background, but it may be slower to the market changes.

A subsidiary of Tom Group, Tom Online had in 2006 taken over eBay China's business and established a joint venture, called EachNet, with the US company, after eBay's share in China declined.

EachNet currently holds less than 5 percent in China's C2C market, according to figures from iResearch.

Since its beta launch in October 2009, has included a wide range of products including fashion, handbags and shoes, health and personal care products, home goods, food and supplements and electronics.

After the online service launch, Ule will start offering offline catalogue services.

China Post on Tuesday signed a partnership with the US direct marketing firm Acxiom to develop the direct mail marketing business in the nation.

China Daily