CHINA VIEW: Dinosaurs Haunt Halls of China Post
The rapid demise of post offices worldwide certainly isn’t limited to China, and is just one of the many global trends being fueled by the Internet. But in China the trend seems particularly poignant, thanks to the country’s penchant for bloated bureaucracy and lifetime employment for government workers.
I’m one of the few people below the age of 60 who still uses China’s post offices, not because I want to but often because I have no choice. And my trips to the post office, while not excruciating, are often unpleasant enough to make me wish that each trip might be my last. Most poignantly, the post office is staffed with legions of young bureaucrats who will only do things a certain way, by the book, and refuse to vary from their official protocols.
Contrast that with the vibrant field of private parcel delivery companies that have sprung up in the last decade, which are just the opposite of their stodgier post office brothers. These companies, with names like YTO Express and the recently listed New York-listed ZTO Express (NYSE: ZTO), are just the opposite of their stodgy country cousins at the thousands of trademark green-and-yellow post offices across China.
A couple of personal stories from the last few days nicely illustrate the differences between these traditional post offices and their new rivals, and show why the post office is almost certainly set for extinction without strong government subsidies. I needed to mail a simple letter back to the US, and first tried to do so at my new company in Beijing. But then I was informed that the post office only made pick-ups from my company twice a week, far different from the multiple pickups each day in the past when it was the main service for sending letters and packages.
By comparison, several representatives from China’s many newer private parcel delivery companies were camped out at the reception desk of my office, each eager to take my letter. One from SFO said they could even deliver to the US, though I balked when he told me it would cost 190 yuan ($30), which seemed just slightly steep.
Ridiculous Request
Annoyed by the situation, I made the 10 minute walk down the street to my local post office where, not surprisingly, I was the only person in line and got immediate service from one of the several clerks staffing the window. But no longer did I show the clerk my envelope, than he explained to me that it didn’t conform to international standards. I thought it was a nice enough envelope, but apparently the printed return address on the front was unacceptable. In the end, I was forced to buy one of their flimsy old-style brown paper envelopes, which really did smack of third-world origins. But those were the rules. At least I only had to pay 8 yuan, though who knows when the letter will actually reach its US destination.
My other recent post office visits involved mailing a large parcel of used clothes to a recycling center in south China, and my frequent trips to cash remittance checks that I get for doing occasional appearances on a local radio show. The clothing trip was a bit of a nightmare, as my friend and I were forced to open our packages and an attendant had to go through them meticulously to check each piece of clothing to make sure it wasn’t dangerous.
The remittances are equally frustrating, since technically the money could be transferred directly into my bank account. But clearly some companies haven’t figured out such high-tech methods, forcing those of us unlucky enough to get remittances to visit the post office and produce a passport each time, even though most of the clerks know me well due to my multiple visits.
Then there’s the China Postal Savings Bank (HKEx: 1658), a post office affiliate, which is one of the most lethargic banks I’ve seen. Most of its depositors are old folks who see the Post Office as the safest place for their money, and its investments are equally conservative. The bank made an IPO back in September that was a major flop, and now its shares trade 12 below their IPO price.
At the end if the day, China is really no different from other post offices like the one in my native US, which also seems set to go the way of the dinosaur. But at least in the US and other western markets, local post offices are trying to find new relevance in this world of growing competition. By comparison, China’s post office seems content to continue with business as usual, even when that means offering far inferior service to the new delivery companies. Perhaps Beijing will be loathe to cut the cord on these post offices due to the huge layoffs it would entail. But I could certainly see some major scale-backs as the government looks for ways to trim waste amid an increasingly sluggish economy.
