Logistics Industry Sample Butterfly: Question, Understand, and Become
"Taking root in the real economy and playing the leading role of modern logistics in linking production and consumption" - from a long-term perspective, this is the journey of JD Logistics, and it is also the sea of stars that the entire industry will eventually embrace.
Author / Ketchup
Produced / New Extract Business Review
After last year's revenue exceeded 100 billion and achieved overall profitability, JD Logistics once again handed over a good report card.
On August 16, JD Logistics released its performance report for the first half of 2023, according to reports, JD Logistics' performance achieved high-quality growth, with a total revenue of 77.8 billion yuan, a year-on-year increase of 32.6%. Among them, the revenue of external customers was 53.9 billion yuan, a year-on-year increase of 57.7%, accounting for about 70% for four consecutive quarters. In the first half of 2023, JD Logistics achieved profitability, with an adjusted net profit of 830 million yuan in the second quarter alone, a year-on-year increase of 288%.
JD Logistics performance report for the first half of 2023
It can be seen that, on the one hand, thanks to the ultimate service experience such as "211 time-limited delivery" and "home delivery", JD Logistics deeply occupies the minds of users, and the revenue of other customers including express delivery and express transportation in the first half of the year increased by 89.2% year-on-year, reaching 38.9 billion yuan;
At the same time, JD Logistics continues to promote integrated supply chain logistics services globally, and the scale of cooperation with leading customers in FMCG, automotive and other industries continues to expand, and the revenue of integrated supply chain customers reaches 38.9 billion yuan. While creating a diversified revenue source for JD Logistics, the integrated supply chain service also gives full play to its model advantages, resource advantages and ultimate service advantages, forming a win-win pattern with partners.
On the other hand, "external customer revenue" accounts for 70%, which means that JD Logistics' independent hematopoietic capacity has once again been verified by the market, and it continues to maintain a large incremental space.
In fact, the favor of leading enterprises in various fields means that the supply chain warehousing and distribution integration model represented by JD Logistics has passed the test of time, and the "big man" that has sprung up from the beginning has become the object of the industry's "copying operations". After combing through JD.com's logistics actions, we can see that after completing the accumulation of the ability of national supply chain network, logistics technology, and business flow insight, it has a more solid foundation and has begun to expand its territory in multiple directions.
While continuing to surpass itself and further focus on the ultimate service, JD Logistics has deeply participated in the upstream and downstream of the industrial chain vertically, completing the leap from logistics to "big logistics"; Horizontally explore overseas markets and broaden the scope of international logistics. At a time when the industry is seriously involved, JD Logistics provides new ideas for the industry.
First, the involution is intensified
The background of the high-quality growth of JD logistics is that the express delivery industry as a whole has entered the era of "involution".
According to iMedia consulting data, when choosing express logistics, more than 70% of users first consider convenience and speed; Punctuality is the quality that consumers value most for couriers, accounting for 55.5%.
At a time when consumers are eager to "place an order in the morning and receive the goods in the afternoon", JD Logistics has already fired the first shot 13 years ago, and this year it is in the bullseye of the industry.
In March 2010, JD.com announced the launch of the 211 time-limited delivery service, that is, users can receive the goods on the same day when they place an order before 11 noon; Users who place an order before 11 p.m. will receive the goods by 3 p.m. the next day. Two 11 points. This is where "211" comes from.
This move shocked the entire logistics industry at the time, because it was very difficult to complete "211", not only the warehouse site inventory, but also the priority production, but also the new changes in the operation of employees, requiring employees to understand and accept the new way of working.
Therefore, many people were not optimistic or valued this service at that time, but what most people did not expect was that this service later changed the service efficiency of e-commerce logistics, and it can even be said that the logistics threshold was raised to a certain extent, and they did not expect that it would still lead the entire industry after 13 years.
Data show that during the climax of this year's Jingdong 618 promotion, JD Logistics achieved same-day delivery and next-day delivery in more than 95% of districts and counties across the country.
Why can JD Logistics achieve the ultimate service? In fact, it was inseparable from the deep strategic insight of his early years.
In 2007, in the face of customer complaints about logistics-related problems such as slow arrival and damaged goods, Liu Qiangdong, founder of JD.com, insisted on self-built logistics. From the first day of self-built logistics, JD Logistics has implemented the strategy of integrating warehousing and distribution, compressing the express performance chain to the shortest, whether it is warehousing construction or the layout of trunk branch logistics, it follows an underlying logic: store goods to the closest place to consumers to improve delivery timeliness, and insist on door-to-door delivery to serve customers well.
Today, JD Logistics' warehousing network has covered almost all counties (cities and districts) in China, with more than 410,000 self-owned front-line employees, which is an important cornerstone for the "211 time-limited delivery" to be widely rolled out across the country.
At present, driven by multiple factors, the logistics industry as a whole has entered the era of "volume service". On the one hand, the stock market competition, price war can only be reduced one after the other, can not bring new increments. On the other hand, consumers expect higher thresholds, and the requirements for faster timeliness and better service are becoming clearer. Major express delivery companies are increasingly understanding that only by improving their services can they get a share of the stock market.
Because of this, the market has experienced a process of "questioning JD.com, understanding JD.com, and becoming JD.com", or imitating JD.com Logistics in the national layout of warehousing and self-operated express, but also began to speed up, approaching the direction of "211 time-limited delivery".
Of course, the road to "becoming Jingdong" is tortuous - the underlying logic of JD.com's logistics supply chain determines that it has carried out a comprehensive layout of supply chain and warehousing around the ultimate service from the beginning, and for some enterprises that "orange born in Huainan" and lack service soil, "copying operations" seems to have become the "only shortcut" to quickly make up for more than ten years of "service window".
Second, the "era of great logistics"
In any industry, when the head enterprises concentrate on allocating resources and achieving the ultimate in business and services, it means that the industry has entered a mature period and indicates that the ceiling of the industry is coming. In the logistics industry, after the head enterprises go to the same place and complete the service test, they will turn the rudder in several directions and enter the "era of big logistics".
What is the "era of big logistics"? Its signature feature, that is, the deep integration of logistics and industry - logistics is not only a function of transportation and warehousing, but also deeply involved in the upstream and downstream links of the industrial supply chain to achieve deeper supply chain collaboration and optimization. "Big Logistics" not only emphasizes the flow of logistics in the industrial chain, but also pays attention to the optimization of the value chain of logistics, and reduces waste in the logistics link through the synergy of logistics and industry, reduces transportation costs, and improves transportation efficiency, thereby creating greater value for the supply chain.
Specifically, the era of logistics will fully test the underlying service capabilities, technical strength, supply chain infrastructure construction, and in-depth insight into various industries. Judging from the cooperation practice between JD Logistics and major industries and enterprises, it has begun to take the lead in advancing deeper into the industrial chain.
In the FMCG industry, taking the cooperation between JD Logistics and COFCO Coca-Cola as an example, the scope of cooperation has expanded from one warehouse to multiple warehouses across the country, and its services have also penetrated into all areas of the customer's supply chain, not only providing customers with online omni-channel warehousing and fulfillment services, but also helping them expand warehouse network planning, formulate supply chain plans, and maximize the quality of fulfillment.
The same is true in the automotive industry. Relying on digital intelligence technologies such as big data and inventory planning, JD Logistics has been able to continue to deepen cooperation with leading automotive enterprises, provide them with supply chain management of automotive after-sales spare parts, and achieve overall optimization of inventory levels, service satisfaction rates, distribution efficiency and operating costs.
At present, JD Logistics has replicated the successful experience of serving Volvo and SAIC-GM-Wuling, providing integrated supply chain services for after-auto spare parts for many domestic and foreign new energy vehicle customers such as Li Auto, and meeting customer needs in terms of inventory layout, safety management, service response, and performance timeliness.
In fact, not only JD Logistics, in recent years, many express delivery companies have ambitions to march into the depths of the industrial chain, SF founder Wang Wei has repeatedly told employees: "Selling labor to move goods is not SF's ultimate destiny." ”
3. Overseas growth
Another important feature of the "big logistics era" is that the domestic logistics pattern has been basically stable, and going overseas may help logistics companies find new growth points.
In the past 30 years of development of China's express logistics, it has undergone many reshuffles, and some enterprises have withdrawn sadly, but some logistics companies have highlighted the siege and gone to overseas markets. However, with the continuous development of the global economy and the evolution of supply chain management, traditional point-to-point cross-border transportation is gradually being replaced by more complex and efficient supply chain systems.
According to data from China's Ministry of Commerce in May this year, the proportion of cross-border e-commerce goods imported and exported in the mainland has risen from less than 1% five years ago to about 5%, and leading logistics companies have also responded to the call to go overseas. In this situation, the choice of the path to the sea is particularly important.
Based on its own overseas warehouses, JD Logistics has given a good solution: with overseas warehouses as the core, supply chain and ultimate service as wings, and then injected with "digital intelligence soul", while reducing costs and increasing efficiency in the supply chain, it can also greatly improve market response and risk resistance, and better support Chinese brands to go overseas.
Taking the cooperation between Hunkemöller, a famous European high-end garment brand, and JD Logistics as an example, its tens of thousands of SKUs and the fulfillment of orders in 17 European countries are completed by JD Logistics. In the process of service, JD Logistics continued to precipitate and upgrade solutions and services, and adopted more flexible cargo-to-person AGV robots and "Earth Wolf" AGV handling robots to improve operation and picking efficiency by more than 3 times.
It can be seen from the actions in the semi-annual report of JD Logistics that just as ten years ago to make efforts to provide ultimate service, at the advent of the new wave, JD Logistics once again "predicted the industry's prediction".
At present, JD Logistics has nearly 90 bonded warehouses, direct mail warehouses and overseas warehouses around the world, and has served many well-known domestic enterprises such as Huawei, Honor, Midea, CATL, Mindray Medical and many other well-known domestic enterprises overseas. In order to supplement the international tail-end transportation, in June this year, JD Logistics signed a cooperation agreement with the French Geopost company to achieve one-day delivery in Europe, which provides other express companies with new ideas for going overseas at a time when domestic involvement is serious.
In the upcoming second half of the logistics industry, JD Logistics' positioning is as its CEO Hu Wei said: "rooted in the real economy, play the leading role of modern logistics linking production and consumption" - from a long-term perspective, this is the journey of JD Logistics, but also the sea of stars that the entire industry will eventually embrace.