China’s big five parcel delivery companies seek to raise funds ahead of consolidation wave

China’s five largest delivery companies are seeking to raise funds via share sales at home or abroad in the near future, in an effort to build up their war chests ahead of an expected industry consolidation as Beijing encourages a fast-tracking of development in the online economy.

The big players plan to use the funds to upgrade and expand their facilities, and to buy out smaller rivals.

Four of the top delivery companies in China, including SF Express, YTO Express, ShenT

ong Express and Yunda Express have been engineering their own backdoor listings on the domestic A-share market. ZTO Express, a delivery company that ranks in the top five, plans to raise as much as US$1.3 billion (HK$10.1 billion) via an initial public offering in the United States.

“A listing status gives the companies the opportunity to hone their image and increase their financial strength,” Zhao Xiaomin, an angel investor and independent researcher in China’s logistics sector said. “The ultimate goal is to enhance business efficiency and secure a leading role in the intense market.”

The breakneck growth of online shopping in China helped to foster a major expansion of the delivery businesses over the past decade.