In 2009, the revised Postal Law of the people's Republic of China was promulgated and implemented, and private express deliveries such as Shunfeng, Shentong and Yunda finally became regular. In the same year, Singles Day was born, and consumer demand exploded. Since then, the express delivery industry has entered the fast lane of development.

Over the past 12 years, express delivery has become a general infrastructure of water, electricity and coal, and the express services of Shunfeng, JD Logistics, Inc. and Tongda Department have become an important part of daily life. But even so, life has not been easy for these industry leaders.

For example, in the first quarter of 2021, the performance of Tongda Department and Shun Feng suffered a "strong storm". Because of the fierce price war, only ZTO Express, Yuantong and Yunda made a profit, while Yunda made a profit, but its non-net profit decreased by 30.7% compared with the same period last year. Shentong and Best lost 100 million yuan and 605 million yuan respectively.

In addition, the market was surprised by the first-quarter results of express delivery Shunfeng, which showed that it deducted a non-net loss of 1.13 billion, the first quarterly loss since it went public in 2017. JD Logistics, Inc., who went public in May this year, has yet to improve his losses.

JD Logistics, Inc., Shunfeng and Tongda have their own development paths and unsolved problems. How will they break through in the future? Everything needs to start with the operation mode of the three.

Shunfeng: spend money to break the ceiling

"Fast" is the business background of SF. There is a saying in the industry: "there are two kinds of express delivery, SF and others", which is enough to confirm the position of SF in the industry.

For a long time, Shunfeng's time-limited express service accounts for the largest proportion of all revenue business, which is also the benchmark business for SF to build industry influence. "Shunfeng Today" arrives before 20:00 on the same day, "Shunfeng Morning" arrives before 12:00 the next day, and "obedience to the Standard Express" takes an average of 23 hours.

How to do "fast"? This comes from the direct operation mode of Shun Feng, that is, it adopts the mode of "end-to-end sorting and transit", and firmly controls all aspects of logistics and core resources in its own hands.

Specifically, Shunfeng has set up a Skynet system of "all-cargo aircraft + scattered + drones", purchased and leased dozens of all-cargo aircraft, and cooperated with third parties to obtain stable belly resources of passenger aircraft to ensure that materials can be transported efficiently and stably; in terms of ground network, Shunfeng covers most prefecture-level cities and county-level cities in the country, with 19000 self-operating outlets and nearly 400, 000 dispatchers. In addition, Shunfeng sets up an "information network" through big data, blockchain, intelligent equipment, intelligent services, machine learning, artificial intelligence and other technologies to complete the construction of intelligent logistics network.

At the beginning of the outbreak of COVID-19 in 2020, Shunfeng transported a large number of anti-epidemic materials to Hubei, and the reason why it can ensure the stability of social logistics is precisely because of its strong control over all aspects of logistics and core resources.

But even for such top students, there will be moments of Waterloo.

In April, SF reported a non-net loss of 1.13 billion yuan, compared with a profit of 830 million yuan in the same period last year. Such performance anti-transfer market shock, and hidden worries have long been buried.

Since 2018, SF has seen its profits decline for the first time since its listing, but no increase in revenue-although SF achieved 90.943 billion yuan in revenue that year, up 27.6% from the same period last year, its non-net profit was 3.48 billion, down 5.9% from the same period last year.

The reason is that the growth of SF Express, the main part of the business, is getting closer and closer to the ceiling. Its 2020 annual report shows that the revenue growth rate of the prescription parts business in 2020 is only 17.4%, much lower than the 64% growth rate of economic parts revenue. However, SF has only about 10% of the market share of lower-priced economic parts, and the cost is much higher than that of Tongda.

In order to seek new growth points, Shunfeng launched a special special distribution service for the e-commerce market in 2019, entered the highly competitive Red Sea of e-commerce parts, and began to build a franchise express network "Fengwang Express" in September 2020.

At first, Shunfeng did preferential special distribution business in the way of "filling the warehouse", that is, using idle transport capacity and warehousing resources to transport special items, so the cost can still be controlled. But demand is growing faster than expected, so SF has had to rent external warehouses and invest more and more, as reflected in its unexpected financial data for the first quarter of 2021.

Although Shunfeng has pressured the price of special specials to about 5-8 yuan, the continuous price war in the express industry is also weakening the price advantage of SF. With regard to the decline in performance in the first quarter of 2021, Wang Wei, founder and chairman of SF Holdings, said at the shareholders' meeting that SF would not lose money in the second quarter, but the full-year profit was not expected to return to the level of the same period last year.

In other words, Shunfeng has entered a new stage of business development, and the growth corresponds to new capital expenditure. In the short term, the pressure on its profits will continue.

JD Logistics, Inc.: if you want to grow, you must also reverse your losses.

JD.com, the e-commerce platform that began to build its own logistics in 2007, initially aims to enable customers to enjoy better express service when shopping at JD.com Mall. At that time, the express delivery industry was like a plate of loose sand. At that time, JD.com 's main 3C products such as mobile phones and computers were expensive and were often stolen in the course of transportation, resulting in company losses, which made Liu Qiangdong dissatisfied with the express delivery companies on the market. As a result, there is the idea of self-building logistics, reducing costs and increasing efficiency.

Under the heavy investment, JD.com 's logistics service has not only become the benchmark of the industry, but also contributed to the important competitiveness of JD.com 's e-commerce business, and its excellent experience also comes from "fast". However, although they all adopt the direct operation mode, JD Logistics, Inc. 's way of doing things is very different from that of SF.

Shunfeng's strong point lies in its end-to-end express delivery capability, while JD Logistics, Inc. pays more attention to "warehouse allocation". It adopts the warehouse allocation model of "regional warehouse-front warehouse-end distribution" to promote merchants to transport goods directly into warehouses all over the country. omit the process of "sending goods to the sorting center", so as to improve logistics efficiency.

In short, JD Logistics, Inc. 's idea is to put the goods directly into a warehouse closer to consumers, so as to shorten the distance of delivery, reduce the number of handling, and finally achieve fast delivery.

Jiancang is a big project, which means that JD Logistics, Inc. is very "heavy", which directly leads to JD Logistics, Inc. 's high income but perennial losses. In 2018, JD Logistics, Inc. has been losing money for 12 years, and the model has been constantly questioned by the market.

In order to reverse losses, JD Logistics, Inc. was spun off in 2017 and began to adjust his business model. In 2017, JD Logistics, Inc. launched the opening-up strategy and gradually accepted third-party orders, serving individuals, enterprises, small and medium-sized businesses, etc., in an attempt to reduce dependence on JD.com Group. In 2020, JD Logistics, Inc. 's share of external income has increased from 29.9% in 2018 to 46.1%, completing the transformation from "enterprise logistics" to "logistics enterprises".

In addition to the opening up of the business, in terms of manpower expenditure, JD Logistics, Inc. 's prospectus shows that this expenditure mainly comes from employee welfare. To this end, in addition to making adjustments to the employee salary structure, JD Logistics, Inc. also tried to reduce labor costs through a third-party warehouse team. According to the prospectus, the proportion of outsourced costs has risen from 27.7% in 2018 to 32.8% in 2020.

Tongda Department: joining is a double-edged sword.

And Shun Feng, JD Logistics, Inc. to direct business model to ensure service experience is different, "Tongda Department" to build up half of the express industry, rely on "join" this light asset model.

The joining model was once regarded as the future direction of the development of the industry, because the model expands rapidly and enterprises can quickly distribute the whole country. In addition, due to the low input cost, express delivery companies with franchise mode as the core can keep the price very low, which is attractive to e-commerce sellers with lower unit prices, and e-commerce parts account for more than half of the total express delivery.

In 2013, BABA teamed up with Tongda Department to set up Cainiao Network. Since then, under the coordination of Cainiao Network and the purchase of shares by BABA, Tongda Department has acquired the vast majority of Ali e-commerce items. At present, the "access system", which is rapidly expanding by joining, has received more than 70 per cent of the market share.

Take ZTO Express, which has the largest market share, as an example. In 2020, ZTO Express's market share was 20.4%. As of December 31, 2020, ZTO Express had about 30, 000 sourcing / dispatch outlets. Yunda Express, which has the second-largest market share, has 3875 franchisees and 32624 outlets and stores across the country.

Compared with the direct operation mode, the decisive way of joining mode is "quantity", but this light asset operation mode also brings the problem of lack of management.

Specifically, under the franchise mode, a single express delivery goes through a total of "three passes" from receiving to delivery: the receiving end franchisee, the headquarters trunk line, and the dispatch end franchisee. The relationship between these three gates is not close enough, and franchisees can join as long as they prepare sufficient funds. In other words, express companies do not have direct access to end customers, so they are unable to understand the management and service pain points of the receiving side and the dispatch side. Therefore, the service quality of Tongda Department has always been controversial.

Different from Shunfeng and JD Logistics, Inc., who have stronger control over all aspects of logistics, the competitiveness of "access system" comes more from the ratio of performance to price, which means that industry competition is more likely to fall into the vicious circle of "price for quantity".

Although it is expanding rapidly, it is not easy for the access department to make money at all. The reason is that the price war between the "Tongda system" is becoming more and more intense, especially after the new player Ji Rabbit Express enters the venue to disturb the game. Although Tongda Department has fought back by banning franchisees from acting for Ji Rabbit's business, the already meagre single-ticket profits have been further drained as each company strives for a larger market share.

In 2020, the single-ticket income of "Tongda Department" is basically 1-3 yuan, and the non-net profit of single-ticket deduction is less than 1 yuan, of which the non-net profits of ZTO Express, Yuantong and Yunda are 0.27,0.12,0.09 yuan respectively.

In the first quarter of 2021, the price war in the express delivery industry intensified. The single-ticket deduction non-net profit of "Tongda" continued to be under pressure. The single-ticket deduction non-net profit of Yuantong and Yunda was pressed to 0.11 yuan and 0.05 yuan respectively, while Shentong's single-ticket deduction non-net loss was 0.04 yuan.

Price war is a practice of killing one thousand and losing eight hundred, which is closely related to the weak control characteristics of the joining mode itself. However, it is not appropriate to assert that it is better or worse to go straight to business or join. Shunfeng, JD Logistics, Inc. and Tongda have their own problems, and their corresponding ways out are also different.

The inflection point has arrived, each finds a way out.

The departments of Shunfeng, JD Logistics, Inc. and Tongda have entered the inflection point, and under different pressures, enterprises with different "genes" have also put forward different development ideas.

At the shareholders' meeting in April, Wang Wei not only explained the "thunderstorm" of SF's performance, but also emphasized the development orientation of SF's "data technology service company with independent third-party industry solutions". The trend reflected by its train of thought is that the practice of relying solely on assets and human input to achieve growth is gradually impracticable, and further reducing costs and increasing efficiency requires technical answers.

JD Logistics, Inc. emphasizes its position as an "integrated supply chain service provider" in his prospectus, which includes express delivery, trunk line vehicle and truckload transportation, last kilometer distribution, warehousing and other value-added services (such as installation and after-sale). In August last year, JD Logistics, Inc. announced the acquisition of leapfrog Express, an integrated express company specializing in less than a load. Behind the acquisition, JD Logistics, Inc. 's intention to extend upstream the supply chain and gain more room for growth is self-evident.

While expanding the new space, SF and JD Logistics, Inc. are also trying to enter the franchise express market. On the other hand, the "access Department" represented by ZTO Express is strengthening its control over each link of "receiving, transferring, transporting, and dispatching" to reduce ineffective labor and waste of resources. in addition, it is also trying to get through the development route from express enterprises to integrated logistics services. add time service, cold chain, cloud warehouse and other capabilities.

In the express delivery battlefield, the industry has gone through a simple "direct camp-join" stage of the dispute. While the price war continues, various enterprises have aimed at the growth space outside of express delivery. The industry is still developing at a high speed, but the life of related companies is still not easy.