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China Post Mart devises new distribution platform for rural consumers
CHINA Post Mart, a 50:50 joint venture between China Post and US-owned China Horizon Investments Group, has created a blueprint for a new distribution platform to deliver consumer goods to rural China, an area 600 million people call home.
The requirement of "on time, in full" is difficult to achieve due to the lack of distribution services. By adopting a modern logistics system, Post Mart said it solved the "last mile" problem by creating a rural distribution network.
With plans to expand into 10 provinces over the next five years, the company is starting with Henan, where it has adopted a "hub-and-spoke" approach, building a system of modern distribution depots, each with a service radius of 40-45 kilometres.
To achieve full coverage of Henan, Post Mart is consolidating 100 warehouses into 30 distribution centres across the province. Feeding this network of local distribution centres is a large provincial distribution hub.
By creating this efficient distribution network, the company has reduced the delivery time of rural outlets' orders from nearly three weeks to one day. In the Henan pilot areas of Xinzheng and Luohe, the company is already realising almost 100 per cent "on time, in full" service levels for rural customers.
"The strength of our far-reaching partner China Post enables this powerful new distribution model to serve the growing retail sales demand in rural markets," said China Horizon Investments chairman Alan Clingman.
China Post operates 146,000 routes covering 5.8 million kilometres, delivering 6.4 billion items a year.
Adding value to Post Mart's distribution capabilities is a programme, called the Emerald Club that enables the company to create profiles of rural consumers, collect data and analyse members' consumption patterns. The company is effectively creating the first big-data platform for China's rural retail market.
The programme will enable brand owners to better understand rural consumer preferences, allowing brands to customise their campaigns and share tailored promotions directly to consumers through Emerald Club e-communications, saving time and marketing costs.
The requirement of "on time, in full" is difficult to achieve due to the lack of distribution services. By adopting a modern logistics system, Post Mart said it solved the "last mile" problem by creating a rural distribution network.
With plans to expand into 10 provinces over the next five years, the company is starting with Henan, where it has adopted a "hub-and-spoke" approach, building a system of modern distribution depots, each with a service radius of 40-45 kilometres.
To achieve full coverage of Henan, Post Mart is consolidating 100 warehouses into 30 distribution centres across the province. Feeding this network of local distribution centres is a large provincial distribution hub.
By creating this efficient distribution network, the company has reduced the delivery time of rural outlets' orders from nearly three weeks to one day. In the Henan pilot areas of Xinzheng and Luohe, the company is already realising almost 100 per cent "on time, in full" service levels for rural customers.
"The strength of our far-reaching partner China Post enables this powerful new distribution model to serve the growing retail sales demand in rural markets," said China Horizon Investments chairman Alan Clingman.
China Post operates 146,000 routes covering 5.8 million kilometres, delivering 6.4 billion items a year.
Adding value to Post Mart's distribution capabilities is a programme, called the Emerald Club that enables the company to create profiles of rural consumers, collect data and analyse members' consumption patterns. The company is effectively creating the first big-data platform for China's rural retail market.
The programme will enable brand owners to better understand rural consumer preferences, allowing brands to customise their campaigns and share tailored promotions directly to consumers through Emerald Club e-communications, saving time and marketing costs.
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