Yiwu’s Parcel Price War Spurs Carton Capacity—and a Late Digital Catch-Up

Yiwu in Zhejiang is both a parcel-delivery powerhouse and a key node for packaging boxes.

In 2020, 24.69 million parcels left Yiwu for destinations across China every day. In the past year alone, newly added production lines could turn out packaging boxes for 30 to 40 million small parcels daily. Since the start of this year, a low-price scramble in express delivery has caused warehouse pile-ups and driven express packaging plants to expand capacity. Yet the sector has long operated with extremely limited digitalization.

In the early years, carton plant owners ran their businesses with handwritten figures and fax machines. For monthly deals worth hundreds of thousands or even millions, ordering, delivery and account reconciliation were all done by hand. Digitalization arrived here slowly yet urgently. It was not until 2021, as new technologies were introduced, that traditional packaging companies began stumbling toward internet-enabled operations.

Master Tian, the plant’s longest-serving employee, has worked in packaging for more than 20 years. Factory life has given him rough, dark skin, a loud voice and a casual personality—almost an occupational mark of the shop floor: if you do not speak up, no one hears you.

In February 1998, after the Spring Festival, a fellow townsman introduced Master Tian to his first factory, and he stumbled into the packaging industry. It was his first 'proper company job,' and it mattered greatly to him. In Fujian before that, he had worked as a construction laborer and a factory gatekeeper, jobs he felt required little skill. This time, he decided to work hard.

This 'proper company' was actually a harsh place back then. When machines ran, exhaust pipes blew toward the ground, sending floor dust into the air; after a day’s work, one wipe of the nose left black marks. In summer, heat and crowded workers made it 'unbearably stuffy.' The machines were also noisy: two people had to stand very close to talk, and some had to plug their ears with tissue.

Tian valued the job. When he first joined, managers were reluctant to let these young newcomers operate machines, so he began as an apprentice: sweeping floors, organizing materials, lending a hand whenever goods needed moving, and watching closely whenever a master operated a machine. After a year and a half, he had learned the process well; the workshop foreman, seeing how serious he was, let him run a machine himself for the first time.

According to the supply order, paper could be thick or thin, kraft or containerboard. Based on customer requirements, the paper was placed on the machine, softened by high temperature and compression, and pressed into a fixed shape in a mold. Paper rolls as tall as a person and a half and weighing more than 100 jin were finally turned into corrugated paper for packaging boxes.

From apprentice to machine operator, team leader and shift foreman, Tian worked his way up. By 2006, the factory had still not grown large. 'Old-line plants like that just kept a few fixed customers and never thought about growing bigger or adding more clients.' He decided to leave the factory where he had spent eight years and move from Fujian to Zhejiang.

During those years, the packaging industry developed slowly and steadily. In the early 1990s, when Tian first entered the trade, packaging was just beginning to emerge. Early equipment was far less advanced than today and largely semi-automated; one corrugating line needed dozens of workers. Competition was not intense, and it was a profitable business. After 2000, as competition intensified, equipment had to be upgraded, efficiency rose, and labor costs fell.

When Tian moved from Fujian to Zhejiang in 2006, mechanized equipment had already appeared. Like him, most people entering the trade were brought in by friends or fellow townsmen. 'Back then, it was people like us, with few other skills, who went into factories to learn a trade and earn a living.'

In 2008, business was especially easy. Orders came looking for the factory while people simply waited. 'We did not need salespeople to go out...' (The original article is longer; this is an excerpt.)