China's express delivery sector grows as consumption recovers

China's express delivery industry reported encouraging business performance in February, a signal that consumer spending is gradually catching up in the world's second-largest economy.

SF Express, a leading Chinese courier enterprise, saw revenue from its express delivery business expand 37.08 percent year on year to 13.5 billion yuan (about 1.96 billion U.S. dollars) in February, according to the company's business report released Sunday.

The revenue growth has mainly been driven by recovering production activities and warming consumption demand, SF Express said.

STO Express, YTO Express, and Yunda Express, three other Chinese courier giants, all logged year-on-year growth in revenue last month, with the former two firms registering an eye-catching revenue increase of over 50 percent.

In February, the total revenue of China's express delivery sector expanded 29.3 percent year on year to 84.97 billion yuan, data from the State Post Bureau (SPB) showed.

Also expanding was the business volume, with express delivery orders in the country jumping 32.8 percent from a year ago last month to 9.18 billion, the data showed.

The boom of the express delivery sector, usually seen as a"barometer" of economic activities, indicated that the Chinese economy is rebooting from the COVID-19 shocks at a faster pace. Consumption, in particular, emerged as a major bright spot in the recovery over the past two months.

Official data showed that the retail sales of consumer goods, a main gauge of consumer spending in the country, climbed 3.5 percent year on year in the January-February period, 5.3 percentage points higher from the level in December 2022.

The SPB attributed the expansion of the express delivery sector to government measures, saying that regions and localities across the country have made consumption recovery a policy priority since the start of this year.

To shore up consumption, supportive policies have been rolled out nationwide, including measures to launch consumption promotion festivals and issue vouchers for automobile purchases.

Despite the rebound in the January-February period, China still needs to encourage consumer spending and further consolidate the recovery foundation, the National Bureau of Statistics (NBS) said.

The NBS expected the consumption revival to continue as consumer confidence will gradually restore and related pro-consumption policies take effect in the next stage.

"Overall, consumption's contribution to economic growth will significantly improve in 2023 compared with last year," said NBS statistician Fu Linghui.

Market watchers are upbeat about the prospects of the courier industry. Supported by sustained consumption recovery, the business volume of the sector is predicted to grow by double digits in 2023, according to Haitong Securities.