China's express delivery industry doesn't need 'small yard with high fences'

As a former practitioner with over 10 years of experience in intellectual property, I must say that the complexity of legal issues related to trademarks is not something the general public can easily understand. There is a basic consensus in the industry: lawyers who excel in trademark law are essentially the "S-tier" of the entire legal profession.

Take, for example, the recently concluded trademark infringement and unfair competition case between Cainiao and Pinduoduo over the use of the "Cainiao" logo. The legal jargon alone is enough to confuse most people. However, if the public only focuses on the outcome as a talking point, they fall into the cognitive trap of "missing the forest for the trees," thereby ignoring the real-life consequences for grassroots workers in the logistics industry.

This presents a paradox: legal resolutions within the framework of disputes are cold and impersonal, while real-world business issues are vivid tragedies and comedies.

Without touching the soul, change cannot occur. Years from now, we may suddenly realize that it was this unexpected legal and commercial entanglement that exposed the underlying flaws of the industry, inadvertently triggering a new wave of transformation in the express delivery sector.

01 On the Surface

On the surface, two Chinese internet giants are locked in a legal battle over whether the use of certain logistics outlet names constitutes fair use. Pinduoduo's Duoduo Maicai listed one of Cainiao's collection points in its consumer pickup location list, prompting Cainiao to sue for trademark infringement and unfair competition.

Cainiao argued that its Cainiao Post stations are key resources for last-mile logistics companies and that Pinduoduo's actions caused public confusion, unfairly boosting its own competitive advantage while harming Cainiao's.

Pinduoduo countered that the names "Cainiao" and "Cainiao Post" were merely used as identifiers in the pickup location list, accompanied by specific addresses and geographical markers to help consumers find pickup points, and would not cause confusion. In practice, Alibaba Group's Taocaicai and Meituan's Meituan Youxuan also use this display method.

The court ultimately partially ruled in favor of Cainiao. Pinduoduo lost the case, and Cainiao successfully defended its rights. This means that, from now on, some consumers will find it harder to retrieve both their packages and fresh groceries in one go at Cainiao Post stations.

The facts are straightforward, but the legal arguments and evidence involved were so detailed that the final judgment spanned 77 pages.

02 It's Law, But Also Business

However, even 77 pages of text cannot fully capture the intricacies of terminal logistics operations, let alone reveal the shifting commercial logic behind the dispute—

Because this is not just a legal issue; it's also a business one.

Once upon a time, under Jack Ma's mission to "make business easy anywhere," the Cainiao Alliance emerged, green and unseasoned. It greatly facilitated the far-reaching reach of Alibaba's e-commerce ecosystem and accelerated the digital transformation of China's logistics and express delivery system. Despite the fallout with SF Express, Cainiao ultimately made significant contributions to the "last mile" of digital-physical integration in the express delivery industry through its Cainiao Post stations.

"Good companies should use business methods to solve social problems," Jack Ma once said, and Cainiao has done just that. As a commercial reward, Cainiao has become one of China's hottest unicorns, operating in over 200 countries.

But the wheels of business logic turn regardless of individual will. As the booming era of e-commerce growth irreversibly gives way to the "Fourth Consumption Era," where rational spending takes precedence, the rise of Pinduoduo, Luckin Coffee, and Mixue Bingcheng has made internet giants realize the meaning of "circumstances are stronger than people."

Friction between old and new generations is therefore ubiquitous. A trademark and unfair competition case is but a grain of sand in this vast landscape. At its core, this commercial backdrop is the canvas on which such cases unfold.

Thus, returning to the fundamental logic of business, we must ask: Can sporadic or frequent conflicts ultimately steer the tide of the times? This question needs no debate; the answer is self-evident.

However, beyond this unquestionable issue lies another that demands broader humanistic, legal, and commercial attention:

Big companies' ventures naturally come with applause and accolades, but who shares the struggles of small businesses?

Even if the damages in this trademark and unfair competition lawsuit amount to millions, it’s far from a crippling blow to Cainiao or Pinduoduo. But for the grassroots express network operators caught in the crossfire, the impact on their future income expectations may not be as subtle as "a few extra bushels of grain."

Running an express delivery outlet is the foundation of a family's livelihood—housing, education, healthcare, and retirement all depend on it. This small business, centered on per-parcel earnings, generates mere pennies per package, and each penny contributes to the hope of a better future.

Conversely, it is these hopes that, at the most basic level, uphold the credibility of China's "last mile" express delivery. These workers may not care about the hottest topics like AI models or logistics robots, let alone the complexities of trademark and competition law. Yet, all these things they ignore may well become the "Cretaceous period" of their small businesses.

After all, due to an unexpected legal dispute, some of them are about to lose a batch of "hope parcels."

03 It's Business, But Also Survival

According to statistics as of late 2023, the logistics and express delivery workforce, primarily composed of couriers and food delivery riders, exceeds 84 million, making it one of the largest employment clusters.

For terminal outlet franchisees, it might still qualify as a small business, but for most workers, it’s a means of survival.

As we’ve noted in previous reports, when users opt for express or food delivery services, they are essentially paying for the time and effort of couriers, outlet operators, and riders. This payment allows users to save their own time and energy.

For this payment model to sustain, a key prerequisite is that the user's time value must exceed that of the courier or rider. The higher the user's hourly wage compared to the worker's, the stronger the payment inclination and the lower the sensitivity to fees.

During an era of macroeconomic growth, development could overshadow payment conflicts, providing strong support for the logistics industry. This was a major macro factor behind the rapid rise of express and food delivery in the past economic cycle.

But in today's global era of stagnant consumption for daily goods and services, the accumulation and eruption of certain contradictions are profoundly altering the competitive logic of the logistics industry. As payment expectations decline and workers' survival pressures mount, reducing friction costs—rather than increasing them—has become a key strategy for industry competition in this new cycle.

Especially since every skirmish in the terminal logistics network ultimately affects the lives of countless households. Their resilience is being tested by the current economic downturn, and the latest mission for major industry players is to collectively combat this trend, not exacerbate it.

This is a battle for survival, but not just for grassroots express workers—it’s a battle for the entire logistics industry. Clearly, not all competitors realize this.

Through this untimely yet legally sound trademark and unfair competition lawsuit, we can also glimpse more remnants of the old cycle, such as:

● Distorted business logic: Terminal outlet franchisees, as independent operators, should be self-managing and self-sustaining, but brand owners impose restrictive rights, preventing them from optimizing operational costs on their own turf.

● Misuse of data advantages: In the current terminal express market, "pickup codes" remain a highly valuable data innovation. But the flip side is that when market share leads to user data advantages, these advantages aren’t used to maximize overall industry efficiency but as a competitive tool to "hijack" consumers and outlets, raising time costs for end-users.

Business competition is never a dinner party, and what exists is often rational. But the definition of "rational" evolves with the times—the "Interim Regulations on Express Delivery," effective May 1, 2018, already stated: "Multiple express delivery enterprises are encouraged to share terminal service facilities to provide users with convenient last-mile services."

This also makes it clear that, in law and competition, fairness is ultimately about putting people first.

04 Conclusion: China's Express Industry Doesn’t Need "Small Yards, High Walls"

Zooming out, the biggest challenge facing China's industrial economy today is the "small yard, high fence" erected by other countries in the semiconductor supply chain during the AI era. The lack of heterogeneous computing power is hindering the progress of China's AI models and blocking the revitalization of every economic capillary.

Do unto others as you would have them do unto you. Similar barriers should not—and cannot—be raised across vast industrial belts.

In our view, whether it’s Pinduoduo or Cainiao, their industrial stature means both are key drivers of China's economic ascent to new heights. Competition is inevitable, but fundamentally, as representatives of new productive forces serving the broadest populations, they share common interests and missions.

The underlying logic is thus self-evident: openness is the only path to industrial prosperity. China's express industry doesn’t need "small yards, high walls."