A growing number of neighborhoods across China have taken a stand against Hive Box, the operator of China’s largest network of express delivery lockers, which people use to receive goods bought from ecommerce vendors. They are calling for a boycott after the company ended free services after it acquired its biggest competitor in the business of smart lockers.
On April 4, in a move to increase membership sales, Hive Box announced that it would stop letting casual users store their deliveries in its lockers for free, a service that has been the company’s biggest draw since its establishment. Under the new policies, non-member customers can leave their deliveries in a Hive Box locker free of charge for the first 12 hours. After that, a fee of 0.5 yuan ($0.07) will be charged for every 12 hours until the total cost reaches 3 yuan ($0.42). To avoid these fees, users can pay 5 yuan ($0.7) a month to become a Hive Box member.
Founded in 2015, Hive Box is a relative latecomer to the business of smart lockers, which is booming thanks to China’s thriving ecommerce sector. But the company is owned by China’s second-largest courier company, SF Expressstartup, and by last year had grown into “the world’s largest parcel machine operation company,” with more than 170,000 locker units in over 110 Chinese cities, according to a press release (in Chinese) issued by Hive Box last year. The firm says that in 2019, about 200 million people across China retrieved 2.5 billion packages from its lockers, accounting for around 5% of the country’s total parcel deliveries in 2019.
Last week, Hive Box unveiled its plan to acquire 94,000 lockers controlled by state-owned postal service company China Post, currently the second-largest delivery box system in China.
In response to the news about the fee change, users of Hive Box were quick to voice their displeasure on Chinese social media. But it wasn’t until the proposed acquisition was revealed that swarms of angry customers started announcing their intent to boycott the business entirely, with many people accusing Hive Box of leveraging monopoly power to force a price increase on its users. “It spent a fortune to drive its competitor out of business. Now we have no choice but to pay a price for its ambition,” a Weibo user complained. Another one wrote (in Chinese), “My package is supposed to be delivered to my hands. Considering that the logistics companies use Hive Box for their own convenience, why should I pay for that as a customer?”
Critics have gone further than complaining online. On May 5, the management committee of a residential compound in Hangzhou released a statement (in Chinese) saying that the residents had reached a consensus to pull the plug on Hive Box’s lockers until it opens negotiations with them. According to the committee, it allowed Hive Box to place its lockers in the area on the condition that the service would be free. By increasing the price without its permission, Hive Box has allegedly broken the agreement. Since then, a number of neighborhoods across China have followed suit (in Chinese), including a few in major cities like Shanghai and Beijing.
However, Hive Box has refused to back down. Over the weekend, the company issued a response (in Chinese) to the management committee in Hangzhou, saying that the initial deal it agreed to didn’t include any terms forbidding price increases in the future. “It’s illegal for the committee to make decisions on behalf of all the residents,” the statement said. Hive Box also stressed that the price increase was driven by its desire to make deliveries more convenient for recipients. “Given that China has been home to the world’s largest courier delivery volume for five consecutive years, the efficiency of our lockers is not just critical to our business, but also vital to the whole parcel-delivery industry,” it said.
But according to some critics, it’s highly likely that Hive Box was acting out of desperation, given that the company has been struggling financially for years. In 2019, Hive Box suffered a staggering loss of more than 700 million yuan ($98.6 million). With its eyes on an initial public offering in the near future, it’s imperative for the company to reach profitability in 2020. “Now it’s the perfect timing for it to implement a price increase because people rely on its lockers to receive deliveries more than ever in fear of human-to-human contact in the time of COVID-19,” a financial blogger wrote (in Chinese).