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China's e-Commerce Resilient Despite Weakening Household Consumption, Giving ZTO Yet Another Bumper Year

The logistics provider's market share fell as its parcel volume growth trailed the industry last year, signaling its profit-oriented development strategy was facing headwinds

Key Takeaways:

ZTO's parcel volume increased 12.6% last year to 34 billion units, slower than the industry growth rate

The logistics company's market share dropped from 22.9% in 2023 to 19.4% last year, falling below the 20% mark for the first time since 2020

Weakening household consumption in China has yet to dent the country's love affair with e-commerce, as a broader trend of ever-smaller packages drives the latest growth wave. Such a move towards "good things in small packages" has charged up the industry, at least in terms of parcels delivered. That was true in 2024 for industry leader ZTO Express (Cayman) Inc. (2057.HK; ZTO.US), whose latest annual results show it recorded yet another bumper year.

The results show ZTO's revenue rose 15.3% year-on-year in 2024 to 44.3 billion yuan ($6.12 billion), while its profit increased 0.8% to 8.82 billion yuan.

Data from China's State Post Bureau shows a massive 174.5 billion packages were delivered nationwide last year, up 21% year-on-year, accelerating from the 19.4% growth in 2023. But the industry's total revenue grew just 13% to 1.4 trillion yuan, slowing from the 14.5% growth in 2023.

While ZTO's revenue growth slightly outperformed the broader industry, the growth of its parcel volume showed signs of slowing. Last year the company's volume of parcels delivered totaled 34 billion units, up 12.6% year-on-year. While that was enough to make the company the industry's largest courier by parcel volume for a ninth consecutive year, its volume growth was well behind the industry average of 21%. As a result, ZTO's market share dropped from 22.9% in 2023 to 19.42% in 2024, falling below the 20% mark for the first time since 2020.

China's delivery rankings based on parcel volume were roughly the same in 2024 as 2023. ZTO led the way, followed ...