Nowadays, the stock competition in the express delivery industry has become increasingly fierce. The e-commerce giants stand in their own teams, and the “express dark horse” extremely rabbits and “e-commerce rookies” are fighting a lot.
According to news on April 12, Pinduoduo has recently issued a statement through the merchant version of the App, clarifying that there is no special cooperation or investment relationship with Jitu Express. Pinduoduo is eager to clarify the relationship, or it may be related to the fact that Jitu Express was rectified by relevant government departments due to “low-price dumping”.
It is reported that this “dark horse of express delivery”, who had been rumored frequently with Pinduoduo, started in Southeast Asia. In early 2020, Jitu rushed into the Chinese market with a high-profile attitude of burning money at a low price. It only took a year for the daily order volume to be related to Tongda. It is worth more than 50 billion yuan. Its founder, Li Jie, has an OV background, and his aggressive strategy of burning money for scale is quite “smart style.”
Since the beginning of this year, Jitu has not been afraid of banning the express delivery giants, relying on the resources of the OV series to continue to hold high, even boasting that it will break through 40 million tickets/day by the end of 2021 and hit the market in mid-2022; To be the third in China within three years.
However, the growth rate of the express delivery industry is slowing down, and industry barriers are extremely high. It is necessary to carefully build a capillary-like network and accumulate scale advantages for a long time. To achieve the above goals, it is not realistic to burn money to snatch the cake from others. The only choice seems to be Pinduoduo, the fastest growing e-commerce rookie.
Raised 11.8 billion, with a valuation of 51.1 billion
According to media news on April 7, J&T Express has completed a US$1.8 billion (approximately RMB 11.8 billion) financing, with a post-investment valuation of approximately US$7.8 billion (approximately RMB 51.13 billion).
The investors behind are also quite luxurious, Boyu Capital led the investment of US$580 million, and Sequoia and Hillhouse also followed suit. It is rare for three top funds to simultaneously grab a share of financing from a young company.
Surprisingly, this dark horse of express delivery with a valuation of more than 50 billion has only been established for six years and entered the Chinese market for only two years.
In March 2020, the extremely rabbit express service was officially launched in China. After only two months of operation, the entire network’s business volume exceeded 2 million; during the 618 promotion period, the entire network’s daily order volume has stabilized at more than 5 million; On the day of Double Eleven last year, the number of tickets issued exceeded 16 million, which is comparable to the Tongda system.
In fact, express delivery is a very “involved” industry. There are two types of domestic express companies, one is the franchise model represented by Tongda, and the other is the direct operation model represented by SF Express and JD.com. Generally speaking, express delivery companies represented by the Tongda system have been developing hand in hand with the entire e-commerce industry for many years and have a high moat in terms of scale and single ticket cost; while self-operated investment is relatively large, the model is heavier, and new entrants to the market It is difficult to form substantive challenges in the short term.
With the help of capital and the experience of the giants, the newly entrant Jitu chose the “self-operated + franchise” model, that is, the transfer center is directly operated and the terminal outlets are joined, so it can expand efficiently.
According to the information disclosed by the company, its self-operated outlets have reached 4,500+ and franchised outlets have reached 1,000+ (including Southeast Asia). The company’s national provincial and municipal coverage has reached 100%, and 77 transshipment centers have been established, with more than 2500 trunk transportation vehicles.
In January 2021, the daily order volume of Extreme Rabbit Express exceeded the 20 million mark for the first time, becoming the only express company in the Chinese market that does not rely on Ali or JD.com. This is also a recognized break-even in the express industry. line. Some people in the industry have suggested that this does not mean that Jitu has been able to make a profit, because it is still in the expansion period of burning money, and the volume of express orders has not stabilized. However, for the young Jitu, it is too early to consider profitability, and the company is not too concerned about whether it makes money or not.
At the beginning of April this year, there were market rumors that Jitu plans to conduct an IPO of more than 1 billion U.S. dollars in the United States. According to media reports, since Jitu is already preparing to go public, it may no longer have private equity financing. The tens of billions of financing this time has a high probability of being a Pre-IPO round. As of press time, Jitu official has not yet made any positive response to the listing rumors.
It is worth noting that the latest valuation of Jitu has surpassed the franchised express delivery giants such as YTO, Shentong and Yunda, and is second only to Zhongtong, which has been operating for 19 years (the Hong Kong stock market is valued at about 1,600 yuan). In self-operated express delivery, the market value of SF Express is about 300 billion yuan, and the estimated value of JD Logistics, which is about to go public, exceeds 250 billion yuan.
At present, the ratio of Jitu’s self-operated to franchise is about 9:2, and self-operated still occupies the majority. Market participants believe that Jitu’s current valuation of 50 billion still has a lot of room for improvement. If it can be listed, its valuation is expected to be against the 100 billion giants.
The OV series “barbarians” enter the express arena
As a dark horse that successfully entered the express industry, it has a lot to do with the founder of Extreme Rabbit Express with a background of “OV series”.
According to public information, the founder of Jitu Express is Li Jie. He joined Jiangsu Anhui BBK Company in 1998; he became the general manager of OPPO Jiangsu and Anhui regions in 2008; he was the head of OPPO Indonesia in 2013, leading the OPPO team to open up the Indonesian market and become the market The number one mobile phone brand in shipments.
In August 2015, in the context of the rapid growth of the Southeast Asian e-commerce market, relying on OPPO Indonesia’s network throughout the country, Li Jie established a technology-based express company J&T Express, which is also called Jitu Express. In just four years, Jitu quickly grew into the top e-commerce express brand in Southeast Asia. At present, the company has more than 5,500 directly-operated and franchised outlets, currently employs more than 60,000 people, and receives an average of 1.8 million parcels per day.
In September 2019, it was reported for the first time that Extreme Rabbit Express wanted to enter the Chinese market. Some market participants said that Polar Rabbit was considered to be a logistics carrier for Pinduoduo. After that, Alibaba and JD.com made a series of layout adjustments in the logistics field, which may have quietly “challenged”.
In March 2020, Jitu Express completed the system docking with Pinduoduo, Suning Tesco, and JD.com, and the official website of China was also officially launched, marking its official entry into the Chinese market.
Behind the rapid growth of Jitu, it actually benefits from the “point-to-point feeding” of the OV system’s traffic. For example, OPPO, as the mobile phone brand with annual shipments of hundreds of millions and ranking third in domestic sales, has more than 200,000 offline retail stores nationwide. In the terminal delivery part, Jitu can deeply participate in the offline delivery of 3C electronic products such as OPPO mobile phones, so as to quickly build a delivery network in China, especially in 3-5 tier cities.
In addition, the market generally believes that Jitu may be “deeply bound” with the e-commerce rookie Pinduoduo, eating the future increment of the express industry-the big cake of sinking the market, and it can develop rapidly.
Prior to this, the relationship between Jitu and Pinduoduo had been rather ambiguous, and the two sides did not admit it or deny it explicitly. In fact, it is said that more than 80% of Jitu’s business comes from Pinduoduo.
But recently, after Extreme Rabbit was punished for its low-price war, Pinduoduo issued an emergency statement to clarify the relationship. It pointed out that in the process of developing customers, some branches and staff of Jitu Express recently communicated to merchants that “Pingduoduo orders can be exempted from false delivery related penalties and the probability of being punished is low” and “Pingduoduo” “Investment, the two parties have a special cooperative relationship” and other news are false.
Pinduoduo stated that the purpose of the “Pinduoduo Shipping Rules” is to regulate merchants’ delivery behaviors and ensure consumers’ shopping experience; Pinduoduo adheres to platform-based operations, and the special guarantee cooperation with Jitu Express during the Spring Festival was launched in February 2021. At the end of the 22nd, the platform’s shipping rules will be implemented in accordance with the unified standards announced by the platform, regardless of which express company the merchant chooses for delivery.
In addition to the support of resources, the brand of “OV Series” is more reflected in the management style. For example, Jitu’s core strategy is to fight a “blitzkrieg” by burning money at a low price.
It is reported that in Yiwu, the general cost price of express companies is 1.4 yuan per order, and the income of each package is mostly 1-3 yuan. The price of the Extreme Rabbit is basically close to that of the Tongda series, which is famous for its cost-effectiveness, and it was even lower than the Tongda series by about 1 to 1.5 yuan per order. There were also very rabbit franchisees in order to sprint sales, hesitate to receive at a loss price as low as 0.8 yuan per piece.
It is worth mentioning that the polar rabbit has two powers. Not only give the sender a low price, but also give the courier a high price in terms of transportation staffing. According to the data, when the Tongda express delivery fee has repeatedly dropped and the courier strikes, the courier of Extreme Rabbit Express is holding 2 to 3 times the delivery fee of the Tongda express delivery.
However, the aggressive low-price war strategy is suspected of affecting the normal order of the industry, and the high-profile behavior of Extreme Rabbit has long attracted the attention of the regulatory authorities.
According to news on April 7, Yiwu Post Management Bureau confirmed that Jitu Express was diagnosed and treated due to “low-price dumping”. The main measure was to stop some distribution centers, which had been implemented on the same day. The warning letter issued the day before showed that the bureau had notified Jitu Express four times that it would not dump at a price far below the cost, but the company did not rectify it as required.
The future of “express dark horse”
In recent years, as the industry’s growth rate has slowed down significantly, it has become a consensus that incremental changes to stocks have become a consensus. The competition among top players has become more intense, making it more difficult for outsiders to get involved. After the waves hit, the old express delivery giants will naturally not wait to die, and have stood up to “encircle and suppress” extremely rabbits.
For example, Yunda issued the “Notice on Prohibiting the Agent of Jitu Business on the Whole Network”, which requires that both ends of Lanpai shall not act as agent of Jitu Express for any reason or in any form. At the same time, YTO also issued the “Punishment Notice on Acting for Jitu Business” on its intranet, imposing a penalty of RMB 30,000 on the branch companies involved in illegally acting for Jitu business.
Nowadays, the pattern of the express delivery industry has become clearer, and all companies seem to have “occupied the mountain as the king.” Industrial Securities pointed out in the report “Research and Judgment of Express Industry Trends in 2021” that the franchise express delivery industry is accelerating its differentiation: Jitu is following the rapid expansion of Pinduoduo; Zhongtong and Yunda tend to be neutral to e-commerce platforms; Yuantong, Shentong and Best, which have more shares, have become more dependent on Ali. This also means that the future competition in the express delivery industry will turn into grabbing meat from other people’s bowls.
Although from the perspective of the company’s customers in Southeast Asia, Extreme Rabbit maintains close ties with e-commerce platforms such as Alibaba’s lazada and Alibaba’s Tokopedia. But in terms of domestic business, it seems that it is more difficult for Jitu to get a piece of the pie in the existing e-commerce market.
In addition to external troubles, there are also internal concerns. For example, if the pace of expansion is too fast, it is easy to leave sequelae. Now the quality of Jitu’s delivery is worrying.
Compared with other express companies, Jitu’s “infrastructure” in terms of transshipment centers, vehicles and equipment, and staffing is still very weak. Reflected in the quality of delivery, according to the data released by the State Post Bureau, in December last year, the rate of complaints about orders received from users to the postal system was 0.06%, which was more than three times that of YTO.
So where is the future growth point for the thriving Polar Rabbit?
On the one hand, the company’s expansion has not yet seen a slowdown, and the domestic business is simultaneously advancing at a high speed. According to reports, since March 1st, Extreme Rabbit Express has been fully operational in Guangdong, Shanghai, Jiangsu, Shandong, Anhui, and Zhejiang (part of) provinces and regions, and will be gradually opened in other regions in the future.
In addition, international business such as overseas and cross-border will be able to provide great support for Extreme Rabbit to fight in the domestic market. In January of this year, Extreme Rabbit International was formally established. Relying on the network deployed in Malaysia, Singapore, Vietnam, Thailand and other places, it began to provide international express (international standard express and international parcel) services. In March, the Group’s first all-cargo aircraft flew at Budiaalto Airport in Tangerang, Indonesia, which symbolized the company’s official opening of the aviation high-end parts business segment.
The analysis point of view pointed out that Jitu’s internationalization capabilities are better than other domestic express companies. It can rely on the advantages of overseas outlets to focus on breaking through cross-border e-commerce customers and form differentiated services.
You must log in to post a comment.