Why 2025 is a Key Moment for the Diversification and Transformation of Small Parcel Express Companies

Small parcel express companies are facing significant challenges, and 2025 is set to be a pivotal year for their transformation. Here are the key drivers of change and the potential market opportunities for these companies in the coming years:

1. Fragmented E-Commerce and the Shift to Multi-Stage Logistics Models

A major shift is occurring due to cross-border e-commerce platforms adopting segmented procurement strategies. Previously, small parcel express companies provided end-to-end logistics services (from customs clearance to warehousing and delivery). However, now, the "dry warehouse" and "customs clearance" services are being broken down into multiple stages. As a result, logistics companies are required to specialize in certain areas of the supply chain, and those that control core infrastructure and resources in logistics nodes will have a competitive edge.

This shift demands that small parcel express companies develop strong capabilities at each logistics node to remain competitive in the future.

2.Intensified Competition from Global E-Commerce Platforms

Platforms like TEMU, SHEIN, TikTok, and AliExpress are rapidly expanding into overseas markets, reshaping the industry landscape. These platforms, using low-price procurement strategies, intensify competition among sellers of low-value, low-priced products. Additionally, with high traffic and shipping subsidies, many of the customers who once relied on small parcel express companies are shifting away.

In the past, small parcel express services were favored by sellers with a broad variety of SKUs that could not be shipped individually. However, the growing price wars and traffic subsidies offered by larger platforms are gradually eroding the traditional client base of small parcel express services.

 3. Challenges for Independent Sellers

Independent sellers are no longer just competing with one another but are also vying for traffic against the dominant platforms. Platforms like **TEMU** have invested heavily in advertising, and whoever attracts the most traffic secures the most orders. This has created a competitive environment where independent sellers face mounting pressure to maintain their share of the market.

To stay relevant, small parcel express companies need to adjust their business models and strategies to cater to the increasingly complex needs of these independent sellers.

Where is the Market Growth for Small Parcel Express Companies?

Given the changes in the market dynamics, where can small parcel express companies expect future growth?

1.Investing in Core Logistics Infrastructure

The first step for small parcel express companies is to continue investing in the core nodes of the logistics chain. Whether it's warehousing, customs clearance, or last-mile delivery, these are crucial components where infrastructure investments will yield the most benefits. Companies that are able to invest in these areas will be well-positioned to provide high-quality, stable services to customers. Without these critical capabilities, maintaining a competitive edge will be difficult.

2. Focusing on Niche Vertical Markets

Small parcel express companies need to broaden their perspective and reconsider where the market opportunities lie. The key is to move beyond the traditional customer base and explore vertical industries that may not fit the traditional drop-shipping model but still have significant outbound shipping needs. For example, industries with specialized products or a focus on specific markets will require tailored logistics solutions.

Future success may not lie in becoming an all-encompassing logistics provider but rather in becoming a specialized logistics partner for certain verticals, offering end-to-end customized solutions for specific industries or product categories.

3. Targeting High-Value Customers

As low-value products face fierce competition and price wars on platforms like TEMU, the small parcel express market will likely shift toward higher-value products. Sellers with high-ticket items or strong brands are better positioned to afford the higher shipping costs, which can make small parcel express solutions more feasible. For these sellers, the value-added services provided by small parcel express companies—such as efficient logistics solutions and customized services—can be a significant selling point.

4. Expanding to Global Markets with Localized Solutions

Small parcel express companies should explore expanding their services beyond China to other international markets. The current model, which focuses solely on China-to-overseas shipping, may be changing. With factors like the Trump administration's policies and tax exemptions, new dynamics are emerging in the logistics landscape, especially for markets like third-party cross-border logistics bases

In particular, G2B (Government-to-Business) and local cross-border parcel markets may provide new opportunities for growth. Companies can target localized markets and integrate services such as overseas parcel collection or local delivery solutions to create more flexible and competitive offerings.

Conclusion

For small parcel express companies, 2025 is not just another year; it represents a critical inflection point. The transformation from a singular market model to a diversified, globalized approach is essential for survival. The key will be in adapting to the evolving needs of the e-commerce market, including niche sectors, higher-value customers, and offering localized global solutions. Companies that can navigate these changes will not only survive but also thrive in the future landscape of cross-border logistics.

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Public Account: Cross-border E-commerce Logistics Baixiaosheng