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FOUR P I LL ARS OF NEW RE TA I L

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In 1980, China Post, a state-owned enterprise, had also launched an express delivery service (EMS). However, due to the restrictions of being a state-owned institution, it was difficult to keep up with the super-fast growth of market demand. This provided opportunities for entrepreneurs in the private sector.

Wang Wei and SF Express Wang Wei, founder of SF Express, was born in Shanghai in 1971 and emigrated to Hong Kong with his parents when he was seven years old. After high school, rather than go on to college, he chose to become an apprentice in his uncle’s factory. While on business across the border in Shunde, Guangdong Province, Wang realised how cumbersome it was to send samples to customers in Hong Kong. In the 1980s, many Hong Kong companies set up factories in Guangdong for exports to Hong Kong, which led to rising demand for the transportation of goods between the two. Quick money was made by people carrying goods from Shenzhen, a town just across the border, to Hong Kong, as luggage. It’s probable that Wang was one of them – but we can’t be sure. At any rate, in 1993, the 22-year- old seized on the opportunity and established SF Express in Shunde, with RMB100,000 (US$17,355 5 ). SF’s early business process was relatively straightforward: after receiving an order, a courier would pick up the parcel from the sender and take it in person to Hong Kong. The business operated in an unregulated “grey area”, with scant government supervision, which made it somewhat easy to get started. Even though there was no lack of competition, and SF wasn’t offering any particular point of difference to other express delivery firms, business was good. After some serious thought, however, Wang decided to lower his prices by 30%, while retaining his promise for speedy deliver- ies. 6 This strategy attracted a new group of small and medium-sized firms and business took off. Meanwhile, Wang started to streamline the delivery process by requiring goods to be packed together before shipping. He posi- tioned SF as the medium to high-end courier, focusing on speedy delivery of small parcels. The low-price strategy turned out to be very successful, and, by 1997, 70% of goods travelling from Shunde to Hong Kong were transported by SF. 7