Sino-Singapore Jingwei Client, April 16th (Chang Tao) “Now Jitu and Best are on the cusp of the storm, no business and no one dared to report low prices.” Best Express and Jitu Express were dumped on April 9 due to low prices. After being punished by the Yiwu City Postal Administration of Zhejiang Province (hereinafter referred to as Yiwu Post Office), Chen Tao (a pseudonym), the person in charge of Yiwu Yiwu Warehouse, recently revealed to a reporter from Sino-Singapore Jingwei.
Before the penalty, the price of the two express delivery items was around 1 yuan this year, which is lower than the industry-recognized cost price of 1.4 yuan per ticket. Chen Tao said, “Now, the price of each order of Jitu and Best has risen to 1.5 yuan and 1.6 yuan. The price is not superior, and the service can’t keep up. We don’t have to.”
Behind the fines of Jitu and Best is the raging price war in the express delivery industry, and Yiwu is the region where the price war is most brutal. The Sino-Singapore Jingwei client previously reported that The express price here was once as low as 80 cents per order. But the impact of the price war is not limited to Yiwu, but radiates across the country. At the end, both the courier and the consumer felt the “adverse reaction” brought about by the price war.
New latitude and longitude in the data map
Extreme Rabbit and Best increased their prices after being fined and were abandoned by their partners
Recently, hot spots in the express delivery industry have emerged frequently. In addition to SF Express’s claim that it expected a huge loss of 900 million to 1.1 billion yuan in the first quarter, it also caused concern that on April 9, the Yiwu Post Office punished two express delivery companies, Jitu and Best, for low-price dumping. Some of the distribution centers of these two express delivery companies in Yiwu were also suspended for rectification.
On April 14th, a salesperson in the Yiwu area of Jitu revealed to a reporter from China-Singapore Jingwei that Jitu has four or five distribution centers in Yiwu. Currently, only one of them has been suspended and can be shipped normally without being affected by penalties. “ Now the lowest price of Extreme Rabbit is 1.5 yuan per order, and the above control is very strict, but before the penalty is 1.2 yuan per order, 1.3 yuan. ”
Chen Tao runs a cloud warehouse with a storage area of 100,000 square meters in Yiwu. Yuncang can be simply understood as a third-party organization that provides services such as packaging, shipping, and storage to businesses, especially small businesses.
Chen Tao revealed that the price of Jitu before the penalty was 1 yuan per order, which is also the “regular price” of Jitu after the Spring Festival. “Yiwu Post Bureau requires that the unit price of each express company shall not be less than 1.4 yuan, as long as the price of the face order is found to be less than 1.4 yuan, it will be sealed up, whether it is Yuncang or Jitu’s own channels, they dare not report low prices, even if it is No business.”
Under normal circumstances, Yuncang will cooperate with multiple express companies. Chen Tao introduced that, at present, their Yuncang expresses all express delivery except Jitu and Baishi, mainly through YTO. “The quantity of several thousand orders per day, the product weighs several hundred grams, I can give you a price of 1.5 yuan per order. This includes packaging and packaging costs, in fact, the logistics cost is less than 1.4 yuan, we also have some means. If the amount is large and stable in the later stage, there can be some room for it, such as another 5 cents or 1 cent cheaper.” Chen Tao introduced.
Regarding why not to be an extremely rabbit, a hundred, Chen Tao explained that “the two delivery speeds are slow, which affects the ratings of merchants and stores, and customer service spends a lot of time on handling logistics complaints; more importantly, after being fined, the price of Jitu and Best has also increased, which is also 1.5 yuan per order. It’s not cost-effective to use them.”
Another person in charge of a Yuncang Wang in Yiwu revealed to a reporter from Sino-Singapore Jingwei, “There is no express delivery less than 1.4 yuan in Yiwu now. Yuantong, Shentong, Best, Yunda, etc. are 1.6 yuan per order within 300 grams, and the packaging fee is for express bags. An additional 3 hairs and an additional 5 hairs for the carton. Before being punished, the minimum per order for Extreme Rabbit is one yuan, and the minimum for Best is 1.15 yuan per order. Currently I am not doing Extreme Rabbit, and the price of Extreme Rabbit has also increased after being fined, which is not cost-effective. One piece of five or six no one uses Extreme Rabbit.”
As to why Jitu and Best could operate at a price far below the cost price, Chen Tao and the above-mentioned person in charge of Wang agreed that the “killer” is a “subsidy.” “This is more obvious in Jitu. In order to grab market share and order volume, Jitu not only subsidizes merchants, but also subsidizes franchisees.” The person in charge surnamed Wang said.
The above-mentioned Jitu Yiwu regional business staff also confirmed the existence of subsidies to reporters from China-Singapore Jingwei. However, he said that he is not clear about the amount of subsidy for each order. “For regional franchisees, there will be subsidies for completing a certain amount of orders, and the company has established a reward level.”
According to recent media reports, Jitu has completed a US$1.8 billion financing, led by Boyu Capital to invest US$580 million, while Sequoia Capital and Hillhouse also followed suit, with a post-investment valuation of US$7.8 billion. In early April, there were media reports that Jitu plans to conduct an IPO in the United States with a scale of more than $1 billion. However, Jitu did not comment on the above news.
The price war continues, couriers and consumers are “very injured”
Yiwu’s express delivery price war has been around for a long time. Public information shows that Best Huitong launched the “average price sales” strategy in Yiwu in 2013, breaking the balance of the express delivery price market. This trick is very effective, and “four links and one reach” have to adopt a follow-up strategy.
As a result, Yiwu has become a national depression for express delivery prices. For a time, there was a “slaughter price” of “80 cents per order, express delivery nationwide”.
A local business told reporters from Sino-Singapore Jingwei that such a price is basically a loss. But if the price is not reduced, it means that its market share will be occupied by other express companies.
In October 2020, the data released by the Ministry of Transport mentioned that Yiwu’s current express delivery business volume ranks first in the country. In March 2021, Yiwu Post Office disclosed that in January and February alone, express delivery companies in Yiwu completed more than 1.1 billion express orders, a year-on-year increase of 154.6%.
New latitude and longitude in the data map
Although the situation of “8 hairs nationwide” is no longer seen in Yiwu, many industry insiders revealed to the Zhongxin Jingwei reporter that even though the lowest price of Yiwu Express now comes to 1.5 yuan and 1.6 yuan per order, because this price includes packaging , Packing costs, the actual cost left for express transportation is less than 1.4 yuan, and the price war continues.
The price war is also intuitively reflected in the monthly single ticket revenue announced by listed express companies. According to data released by the State Postal Administration in March, the average unit price of the express delivery industry in January and February of 2021 decreased by 20.2% year-on-year, and the revenue per ticket of other members of the “Tongda Department” of Yunda, Yuantong, and Shentong decreased year-on-year in January and February. The amounts were 24.2%, 15.6%, and 19.7% respectively.
The “adverse reaction” brought by the express price war to the end of the logistics is obvious.
Chen Tao revealed that since the end of the Chinese New Year, the express delivery of Jitu and Best from Yiwu to many places across the country has been suspended. “Currently, Jitu is suspended in parts of 17 provinces and cities, and Best is part of 23 provinces and cities. Areas stop shipping.” Chen Tao explained that for normal express shipments out of Yiwu, the delivery fee at the end outlets is 1 yuan per order, but when the price of Jitu and Best is a few cents per order, the delivery fee is only 3 per order. Dime, many outlets will not accept Jitu and Best express mails from Yiwu.
According to a table provided by Chen Tao, since the Spring Festival, Best Express shipments from Yiwu to many regions across the country have been suspended, such as the Economic Development Zone in Hefei City, Anhui Province, Shushan District, Feixi County, and Binzhou City, Shandong Province. Five areas in the urban area, etc., and the reasons for the suspension of distribution were “abnormal outlets and severe express delivery” except for the impact of the epidemic.
The above-mentioned person in charge surnamed Wang also told the China-Singapore Jingwei reporter that Baishi and Jitu do have areas to stop shipping, “the outlets do not accept shipments from Yiwu because of the low cost.”
New latitude and longitude in the data map
According to a reporter from China-Singapore Jingwei, Under normal circumstances, a courier earns 1 yuan per order, a skilled courier can deliver about 200 orders a day, and a novice can deliver about 100 orders a day. According to Chen Tao, “The delivery fee for Jitu and Best Express from Yiwu is only 3 cents per order”, which means that the courier delivers the same amount of express, but the income is reduced by one third.
However, the above-mentioned Jitu Yiwu regional business staff said, At present, Jitu has only failed to achieve coverage in a minority position in the country, and there is no such thing as a suspension of distribution. China-Singapore Jingwei reporters called Best Yiwu Nanxiazhu branch several times on the 15th for verification, and no one answered the manuscript as of press time.
For consumers, this “adverse reaction” is directly reflected in the failure of express delivery, no notification, slow delivery, and so on.
Recently, Mr. Tao in Fengtai District, Beijing, without receiving a call or SMS notification from the courier, accidentally discovered that he had a package delivered by a certain express delivery that had been signed for, and the signee indicated “door”, but Mr. Tao did not arrive home. After finding the package, I contacted the courier and learned that the delivery address was Mr. Tao’s previous address.
There are not a few express-related complaints on the Black Cat complaint platform. For example, the keyword search results for “express delivery without notification” were 885, and the keyword search results for “express delivery without notification” were 218. Among them, there are many complaints such as “delivering the courier to the express supermarket without my consent” and “the courier directly releases the delivery station without notifying the customer during the delivery of the courier”.
An insider of a courier company told a reporter from China-Singapore Jingwei that the courier did not get the consent of the recipient, filling in the signer as “door” or placing the parcel at the door without authorization. This is an irregular delivery. The platform will respond to the express after receiving a complaint. Punishable by the officer.
When will the express price war cease?
Zhao Xiaomin, an express logistics expert and CEO of Guanshuo Enterprise Management (Shanghai) Co., Ltd., said in an interview with a reporter from China-Singapore Jingwei that a long-term price war will bring a vicious circle that will damage consumers and couriers. “Price wars will inevitably bring about fluctuations in express delivery outlets, which means that the end of express delivery is unstable. The direct response is the decline in the income of the couriers and the decline in service quality, and ultimately the loss of users.” Zhao Xiaomin said.
When will the price war end? CITIC Securities predicted in a report that the fierce price war will continue throughout 2021. “Before the general pattern of the industry is determined, any price truce will prove to be invalid.”
Lai Meisong, chairman of Zhongtong Express, said at the end of 2020 that with the progress of the differentiation of express delivery companies, the “price war” will slow down and even an inflection point will appear. As for when the turning point will come, Lai Meisong believes that it will still depend on the market input of leading companies’ production capacity, but “this point of time will not wait too long.”
New latitude and longitude in the data map
Zhao Xiaomin predicts that the price war in the express delivery industry will come to an end at the end of the second quarter of 2021. “It is mainly based on the analysis of the changes in the market share of express delivery companies. At present, there is no greater improvement. At the same time, the instability of terminal outlets and couriers caused by price wars has seriously affected the user experience.” Zhao Xiaomin said, “Price wars At a certain stage, there will be a critical point. For example, express delivery companies continue to cut prices, and business volume does not rise but decline; for example, the number of outlets fluctuates more and more, and the loss of control is a sign of the arrival of the critical point of the price war.” China-Singapore Jingwei APP)
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