SF Express opens over 500 outlets

Courier service provider SF Express Co has opened more than 500 neighborhood service outlets in 70 cities nationwide on the weekend, the company said on Monday, in an effort to tap into the burgeoning online retail market.

The outlets will allow customers to mail and collect packages, try out products and place orders online, SF said in an e-mail sent to the Global Times on Monday.

"SF currently has more than 40 million clients, all of whom are potential customers (for the stores)," it said.

The company has also installed ATMs, electronics repairing services, laundry and fitting rooms in some of the outlets, which are called "Heike" in Chinese, meaning "Hey Customers" in English.

There are no warehouses for the outlets. "That frees SF from the burden of inventory management, which has been a major concern for retailers for years," the firm said.

The Heike outlets are being launched at a time when Chinese Internet and courier service providers endeavor to connect online shoppers with brick-and-mortar stores. That model is seen as a way for companies to market and sell products based on their huge online database, containing information on consumers' buying behaviors and transaction records.

A SF staff member, who wished to remain anonymous, told the Global Times on Monday that the company will open more Heike outlets.

"We had 518 outlets up and running on Sunday, and even now we have more than that number," she said.

The Guangzhou-based New Express newspaper cited an unnamed source as saying that SF will open more than 1,000 Heike outlets by year-end.

Xu Yong, chief consultant at China Express and Logistics Consulting, told the Global Times on Monday that SF launched the Heike service outlets to expand its presence in the e-commerce market.

"SF is strong at logistics, which is a major advantage for it in developing a retail business," he said. "The company will focus on selling high-end imported food and luxury products at Heike in the future."

In May 2012, SF launched an online site, sfbest.com, which sells high-end food and beverages made by other companies. SF touted "cold delivery" as a major selling point, saying this ensures the freshness of products.

Chen Jing, a Beijing resident who bought fruits and rice on sfbest.com, told the Global Times on Monday that she was interested in visiting the Heike outlets.

"The food I bought on sfbest.com was fresh and well-packaged. That makes me want to buy from the Heike outlets," she said.

Ralph Yin, a Shanghai resident who works in retail, told the Global Times on Monday that he would visit Heike to try out products such as clothes and electronics, but will not place orders at the store. "I will compare prices of the products on different websites before placing the order at home."

Yin said he would mail packages at Heike if he could be offered a discount of more than 5 yuan per order, which is now priced at 22 yuan for packages under 1 kilogram.

According to a list of outlets that SF e-mailed to the Global Times on Monday, five Heike outlets were opened in Beijing and Shanghai respectively as of Sunday. All 10 outlets are located in residential blocks in suburban areas in the two cities, the list showed.

Since SF is still testing the business model, it is normal to select locations with lower rents and higher demand for delivery services.

"After figuring out the costs and the popularity of Heike, SF will likely open more outlets in the downtown area," Xu from China Express and Logistics Consulting said.

The SF staff member said the company considered the age, profession and buying preferences of the neighborhoods' residents when deciding the locations of the Heike outlets.