Novice Express! Tongda or Liancainiao vs. JD Logistics

Tech 2023-06-30 21:47:04 Source: Network

That rookie who used to only work as a platform and didn't end up now has also ended up!On June 28th, Wan Lin, CEO of Cainiao Group, directly threw a heavy bomb into the express delivery market: Cainiao has obtained a national express license and officially launched its self operated express "Cainiao Express".(Image source: Cainiao)This change not only surprised SF Express, JD

That rookie who used to only work as a platform and didn't end up now has also ended up!

On June 28th, Wan Lin, CEO of Cainiao Group, directly threw a heavy bomb into the express delivery market: Cainiao has obtained a national express license and officially launched its self operated express "Cainiao Express".

(Image source: Cainiao)

This change not only surprised SF Express, JD.com Express or others, but also complicated the emotions of former members of Cainiao Alliance, such as Shentong, Zhongtong, Yuantong, and Yunda.

Industry experts have stated that with the opening up of JD's logistics ecosystem, a platform like Cainiao will be established; Tiktok also launched an open logistics platform, Yinweida. The independently developed Cainiao Group will have to change due to needs and competitors.

But the transformation of Cainiao Group, as a super ecological platform, has brought about different effects.

Joseph Tsai, Vice Chairman of the Board of Directors of Alibaba and Chairman of Cainiao, set the tone that "as a smart logistics enterprise facing the market and customers independently, Cainiao will adhere toDigitalization, globalization, industrializationOur strategic direction is to continuously invest in building logistics capabilities

How does this tune come to fruition? What major changes will Cainiao Group bring to the entire e-commerce express delivery market?

If there is a major change in the Chinese express delivery market, it needs to be seen that the market is currently moving towards a change.

In 2021, the State Post Bureau issued the "14th Five Year Plan" for the Development of Express Industry. According to the plan, by 2025, China will establish five express delivery brands with an annual business volume exceeding 20 billion pieces or an annual business revenue exceeding 200 billion yuan.

(Image source: Cainiao)

As of now, in addition to Debang Express, which has been merged into JD Logistics Group (owning JD Express), Chinese express brands also include SF Express, Zhongtong, Yuantong, Shentong, Yunda, Zhongyou, Jitu, and Cainiao Express, resulting in 10 local brands.

According to this plan, it is basically to cultivate among these ten enterprises. Either the business scale is large, such as Zhongtong becoming the world's largest express delivery business enterprise. Either it is a large business income, such as SF Express, which has a small business scale but high income and has entered the Fortune Global 500.

What truly tests Chinese enterprises is their revenue and profitability,To build a world-class express logistics enterprise, the combined revenue of ten Chinese express delivery enterprises cannot be higher than that of one enterprise in the United States or Germany. Just having a large business scale is still a form of humility.

In 2022, UPS, a private express logistics giant in the United States, had a revenue of $100.3 billion, equivalent to approximately 7289 yuan; FedEx's revenue is 93.512 billion US dollars, equivalent to approximately 679.5 billion yuan. DHL, the largest express delivery company in Europe, has a revenue of 94.436 billion euros, approximately 743.8 billion yuan.

In 2022, SF Express had a revenue of 267.49 billion yuan, while JD Logistics had a revenue of 137.4 billion yuan. However, under JD Logistics, Debang Express had a revenue of 31.392 billion yuan, and Dada Group had a revenue of 9.4 billion yuan. Together, there is still a gap between the three parties and 200 billion yuan.

(Image source: Cainiao)

In 2022, China Post Express had a revenue of 69.65 billion yuan, while Cainiao Group had a revenue of 63.8 billion yuan. It may also be difficult for a single enterprise to achieve a revenue of 200 billion yuan by 2025.

In 2022, Yuantong's revenue was 53.546 billion yuan, Yunda's revenue was 47.434 billion yuan, Zhongtong's revenue was 35.377 billion yuan, and Shentong's revenue was 33.671 billion yuan in 2022.

The total of the four Tongda families is 170028 million yuan. If calculated based on this, it is estimated that by 2024, the total of four companies will exceed 200 billion yuan, but it is almost impossible for a single company to exceed 200 billion yuan.

But as of 2025, will China generate express logistics group companies with annual revenue exceeding 200 billion yuan: SF Express Group, JD Logistics, Cainiao Group?

If it's the Cainiao Group, why does the Cainiao Group rely on it? If there is an accessibility system, what is the basis for accessibility?

According to the 14th Five Year Plan, if express delivery volume is higher than single delivery volume, it should not be a problem by 2025. In 2022, the domestic express delivery business volume reached 110.58 billion pieces, with a business revenue of 1.06 trillion yuan. But how about revenue and market competitiveness?

Last August, the China Logistics Information Center released the "2022 Top 50 Chinese Logistics Enterprises". Express logistics companies such as SF Express, JD.com, and Three Links and One Delivery have all entered the top 50, but the gap is significant.

At present, what Heng stands in front of Zhongtong, Yuantong, Shentong and Yunda are Jingdong Logistics and SF Express, especially the rapidly developing Jingdong Logistics (Jingdong Express). In 2022, JD Logistics' revenue reached 137.4 billion yuan, a year-on-year increase of 31.2%, and external customer revenue reached 89.1 billion yuan, a year-on-year increase of 50.8%, accounting for 65% of the total revenue.

This can be achieved due to the comprehensive development of JD Logistics from express delivery to comprehensive logistics. In 2022, JD Logistics' integrated supply chain service revenue reached 77.4 billion yuan, while other customer revenue such as express delivery and express delivery reached 60 billion yuan, a year-on-year increase of 78.3%.

JD Logistics continues to raise the competitive threshold with the Tongda system. In August 2022, JD Airlines obtained the "Air Carrier Operation Qualification Certificate", becoming the third self built express logistics enterprise after SF Express and Yuantong. Previously, JD also signed a strategic cooperation framework agreement with the Nantong Municipal Government to build Nantong Airport into a JD logistics air cargo hub.

(Image source: JD Airlines)

In the Tongda system, even if Zhongtong's market value exceeds JD Logistics by 103.13%, its revenue is only 25.75% of JD Logistics. JD Logistics has acquired and integrated Dada in real-time logistics, and Debang Express in express logistics and bulk delivery.

Since this year, after Liu Qiangdong's gradual return, JD Logistics has been constantly deploying troops and expanding its layout. In the future, it may be more difficult to compete with JD Logistics and SF Express only by relying on the business scale of the access system.

On June 26th, JD Logistics announced on the Hong Kong Stock Exchange that Yu Rui had resigned as an executive director, CEO, and authorized representative due to personal reasons; Hu Wei took over as the CEO of the group. Hu Wei previously served as the CEO of JD Intelligent Industrial Development Co., Ltd. in the real estate sector of JD Logistics.

In March of this year, JD Industrial Development has submitted a prospectus to the Hong Kong Stock Exchange, seeking listing.

Hu Wei, who also serves as the CEO of JD.com Industrial Development and JD.com Logistics, may promote the synergy of JD Logistics' heavy assets and further open up the logistics system?

The development and layout of JD Logistics also puts pressure on Cainiao Group, which will also put pressure on Zhongtong, Yuantong, Shentong, and Yunda. Faced with a "strong enemy", Zhongtong, Yuantong, and Yunda need to unite more, rather than competing for prices and consumption for their respective small territories.

From "Tonglu Express" to "Zhejiang Express", from "county merchants" to "Zhejiang merchants", the first generation of "Tongda" express delivery entrepreneurs may need to make some choices.

In March of this year, Alibaba launched the "1+6+N" transformation, with Cainiao breaking away from Alibaba's parent company and becoming an independent company "Cainiao Group". In May, Alibaba's board of directors approved the launch of Cainiao's listing plan, which is planned to be completed within the next 12 to 18 months.

From Cainiao to Cainiao Group, the "small bird" in the past has become the "big bird". Ali is still constantly thrusting his wings into this rookie. Prior to June 18th, Shentong Express announced that its major shareholder plans to transfer 25% of its shares to Cainiao, who will hold 25% of Shentong Express's shares and become the largest shareholder of Shentong.

(Image source: Cainiao)

Targeting high cost-effectiveness and quality service, "Cainiao Express" is seen by the industry as a competition against SF Express and JD Express. Cainiao Express offers quality services such as half day delivery, next day delivery, door-to-door delivery, and night pickup. The horror of competition in the future is not just about SF Express and JD, but also about UPS, DHL, Amazon Logistics, and more.

The best way to change the situation is through integrated development.Will Cainiao integrate Alibaba Capital's Tongda series shares in the future?From the perspective of industry influence and persuasiveness, rookie CEO Wan Lin seems to have difficulty convincing several Tonglu bosses with vastly different personalities together, and even Zhang Yong seems to have difficulty convincing Tonglu bosses with one person and one account.

However, when Joseph Tsai, a capital expert and a permanent partner of Alibaba with Jack Ma, comes to the stage, the situation may be different.

On June 20, with the consent of the Board of Directors of Alibaba Group, Zhang Yong will step down as Chairman and CEO of the Board of Directors of Alibaba Holding Group on September 10 this year, and Joseph Tsai will take over as Chairman of the Board of Directors.

At present, Joseph Tsai has been appointed as the chairman of Cainiao Group, while Ma Yun and Zhang Yong, the former chairman of Cainiao Group, also show that Alibaba Group attaches great importance to the layout and development of Cainiao Group.

(Wan Lin, CEO of rookie, and Joseph Tsai, Chairman of rookie)

Can Joseph Tsai, who once fought capital battles with Ma Yun and was trusted by Ma Yun, bring miracles?

The integration must have a trump card. The leading value of rookie is Joseph Tsai's trump card. According to an internal report by Goldman Sachs Group in May, Cainiao's valuation reached $28.5 billion, equivalent to approximately 207.1 billion yuan.In terms of valuation, Cainiao will become the second largest logistics technology company after SF Express.

The market value of 207.1 billion yuan is also much higher than that of the Tongda system, and it can also become a locomotive leading the Tongda system towards new heights.

Digitalization, globalization, industrialization

Is this a Tongda tether movement? But if rookie+Tongda system, it may be different.

Author: Li Yi Jingzhou

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