Ecommerce delivery: Hive Box apologizes for price increase, but customer revolt rages on

After enduring a world of online hate for a recent price increase, Hive Box, the company that runs China’s largest network of self-service package lockers, released a statement today apologizing for “the inconvenience caused to” its customers. The company, whose boxes have become essential for many ecommerce customers to receive their goods, said that it had reversed its decision to start charging non-member customers for storing their packages in its lockers for more than 12 hours.

“The membership program we rolled out lately has generated a lot of traction. We have been paying close attention to and really appreciate all the feedback, criticism, and suggestions,” the five-year-old startup said in the statement (in Chinese) released on May 15. “We now fully realize that our customers are the cornerstone for our future growth.”

The company also said that it had reversed the price change and would implement a new policy starting on May 20, which would extend the time for casual users to store parcels in Hive Box lockers for free from 12 hours to 18 hours. A special one-month free deal for paid users was also announced.

Backed by China’s second-largest courier company, SF Express, Hive Box has been under scrutiny since April, when it announced an immediate pivot to a membership model and made cuts to its free services. The decision made perfect financial sense for Hive Box, given that the company has yet to reach profitability after suffering a staggering loss of 20 billion yuan ($2.8 billion) since its establishment.

But the new pricing has proved to be immensely unpopular among customers. Many argued that the service should remain free for recipients of deliveries because it was mainly beneficial for couriers who can drop off a host of packages at once at a Hive Box location and achieve higher efficiency at work. “Before Hive Box, all packages were expected to be delivered to my doorstep. Now I have to go pick them up myself. In what world is it okay to charge someone by introducing inconvenience to their life?” a typical complaint read.

Some angry customers have done more than complain on the internet. As of May 13, more than 100 management committees of residential compounds in Shanghai have taken a firm stance against Hive Box by suspending its service. According to them (in Chinese), when they agreed to let Hive Box place its lockers in their neighborhoods, representatives from the company promised that the service would be free. “It’s not our intention to boycott Hive Box. We just want it to open communication with us,” a community leader said.

Facing the backlash, Hive Box initially refused to back down. It even threatened to take legal action to defend itself. In a letter (in Chinese) to a management committee in Guangzhou, which pulled the plug on Hive Box lockers in the wake of the controversy, the company said that the practice had constituted a breach of the contract between them. “We are convinced that the committee had no respect for the agreement we reached and no sincere intention to address the conflict,” the company wrote on May 9.

But Hive Box’s unyielding stance didn’t last long. Earlier this week, China’s State Post Bureau, the government agency that regulates the country’s logistics industry, launched an inquiry into the case and arranged a meeting (in Chinese) with senior executives from Hive Box, ordering them to “undertake social responsibilities, come up with a solution, adjust its pricing, and respond to reasonable requests from customers.” In the days leading up to the apology, Hive Box changed its tone, saying that it had learned its lessons and would make compromises to please its customers.

But the apology has done little to quell the backlash, as many critics said the statement was “too little, too late.” On Weibo, there has been a near-unanimous animosity toward Hive Box, with swarms of people demanding further compromises from the company. “Only six more hours after the talk with the authorities. It can’t even give back its 24-hour free services. Hive Box is really something, huh?” a Weibo user wrote (in Chinese).