There are no endless bullets, even rabbits that can punch holes.
Wen | Liu Zheming, a reporter for China Entrepreneur
Editor| Li Wei
Head photography | Zeng Jing
Li Jie is not famous, but once labeled as a "Duan Yongping disciple", he will often be put in the spotlight; the track of his business is crowded and saturated, but when it comes to the development of Jitu Express, he is often used as a research object.
Because this "rabbit" is running too fast.
In 2015, Li Jie, founder and former CEO of OPPO Indonesia, founded Jitu Express in Indonesia. In 2020, Jitu Express entered the Chinese market belatedly. Late entry, when the competition almost ignored its existence, it stirred up the original tightly sewn express delivery market. In just one year, Jitu reached an average of 20 million orders per day. This goal took Shentong 16 years and Yuantong spent 18 years.
In October 2021, Jitu Express staged a drama that came after it, spending 6.8 billion yuan to acquire the old player Best Express. According to Huachuang Securities, after the integration of Jitu Express and Best Express is completed, the average daily order volume will reach 40 million to 50 million, and the market share of 15.4% in the Chinese express delivery market will be obtained. What is more symbolic is that after the completion of this acquisition, Jitu is no longer only tied to Pinduoduo, but also enters the Ali system for the first time.
At the beginning of this year, this "rabbit" accelerated to more places to "forage".
On March 9, according to the news released by the official WeChat subscription account of Jitu International, "Jitu International is docking Amazon's back-end carrier services" and "the sites planned to open are the United Arab Emirates, Mexico, the United States, Canada, the United Kingdom, Germany, France, Italy, Spain, etc."
However, when China Entrepreneur inquired about the subscription account again on March 15, the message had been deleted. Regardless of the reason for deleting this information, it cannot hide Jitu's ambitions for the global express delivery market.
Just over half a month ago, Jitu announced that it was officially stationed in the Latin American market and operated in Mexico, and the Mexican version of the Jitu Express APP will be launched; on January 7, Jitu announced that it would officially operate express delivery in the United Arab Emirates and Saudi Arabia, and has now established a nationwide self-delivery network and a local warehousing system.
The company, which was founded less than 7 years ago and started in Indonesia, began a new overseas race as a latecomer. According to the official website of Jitu, the express delivery network of Jitu Express has covered 11 countries in China, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Singapore, the United Arab Emirates, Saudi Arabia and Mexico, covering more than 2 billion people worldwide.
"It is inevitable that Jitu will enter the Amazon background this time, because JD.com and Taobao already have fixed partners, and Jitu needs a large e-commerce business resource to cooperate, just as Amazon is more extensive than the market." Xu Yang, director of operations at a global logistics company, told China Entrepreneur.
The strength of rapid expansion comes from the blessing of capital.
In 2021 alone, Jitu Express completed three rounds of financing: in April 2021, Jitu Express received a financing of US$1.8 billion, led by Boyu Capital, with Sequoia Capital and Hillhouse following; in August 2021, it completed a planned financing of US$250 million; in November 2021, Jitu Express completed another US$1.735 billion C1 round of financing.
After three rounds of financing, Jitu's valuation is close to 20 billion US dollars, about 126 billion yuan, becoming the second logistics company with a valuation of more than 100 billion yuan outside the Cainiao network.
Previously, the industry also reported that "ByteDance has completed its investment in Jitu Express", but from the perspective of Jitu's overseas layout, the ambition of this "rabbit" is not to become a "rookie" of ByteDance, it is more like UPS with business in more than 220 countries and regions around the world.
However, users found that this "rabbit" has been too slow in recent months.
Open Weibo and enter "Ji Rabbit" in the search box, most of which are complaints and complaints about Ji Tu. "Daily Economic News" has reported that some of the express mail of Jitu was delayed for nearly a month, and finally returned to the same way, and the customer service of Jitu explained that the reason for the speed of Jitu is: integration. In October 2021, Jitu announced a 6.8 billion yuan acquisition of Best Express, and the integration brought about by this acquisition obviously affected the "speed" of Jitu.
What may make Jitu even more uncomfortable is that this merger also gives the opportunity to compete. On March 9, YTO Express announced that from January to February 2022, the company achieved the completion of express delivery business by 2.297 billion votes, an increase of 27.81% year-on-year. Caixin Data Pass analysis calculates that its business volume growth rate is 9 percentage points ahead of the industry, and one of the main reasons is the "overflow of pieces" brought about by the integration of The Hundred Worlds of Jitu.
Rabbits will always "punch holes" and chisel out new spaces. But this "rabbit" also faces unprecedented controversy and challenges because of low prices, integration and other issues. At the same time, there are no endless bullets, even rabbits that can punch holes.
Source: Visual China
Rabbit-like speed
At the SF 2020 financial report communication meeting held in March 2021, a SF executive reflected: "Although our head enterprise occupies 80% of the entire market share, when the low-price peers enter, the market share cannot be maintained. This means that the era of relying solely on scale to do the market has passed, and no matter how large the scale is, it cannot hold the market. This is a very profound lesson that we see from a strategic perspective. ”
This "low-priced peer" is the pole rabbit.
In fact, the story that Li Jie brought to people seemed familiar. Huang Zheng, also known as "Duan Yongping's disciple", founded Pinduoduo in September 2015, when the annual GMV of Alibaba's e-commerce business was close to 3 trillion yuan, and JD.com was nearly 500 billion yuan. However, in the struggle with the two "giants", Huang Zheng created the record for the development of the fastest e-commerce platform with the low-price strategy, and took Pinduoduo to the NASDAQ in three years. At the end of 2020, the market value of Pinduoduo jumped beyond JD.com.
"Pinduoduo and Jitu play very similarly, and they have caught a pain point to play, that is, cheap." Jiang Weiwei, founder of an e-commerce company, commented, "When Jitu entered, the express delivery industry was already a red sea in the Red Sea, and it was time to beat the teacher to death with a fist. ”
Panning for gold in the Red Sea always requires some piece of courage. Duan Yongping has always advocated "daring to be the world after the world, and then competing for the first", which means that in the originally crowded market, it is not an early adopter, but waits until the market is thoroughly studied before entering, so as to surpass competitors in one fell swoop.
"We must first look at the market and then look at the competitors. When we feel that we have the strength, ability, and can beat the competitors to enter, and then we can do it to the best, establish our brand awareness and reputation, and strive for the corresponding market share. Duan Yongping once shared.
Photograph: Zeng Jing
However, the birth of the pole rabbit is not a story of "scrambling in the future".
"When OPPO went to Indonesia, there was no express delivery there, so I had to build it myself." An Indonesian OPPO agent told China Entrepreneur. Indonesia is OPPO's first stop overseas. In 2013, Li Jie, who did not know English, traveled to Indonesia three days after getting his passport, and his mission was to cultivate a barren land for OPPO. OPPO achieved a market share of 7% in Indonesia in its first year. By 2015, that number had risen to 20 percent.
At the time, Indonesia's major e-commerce platforms included Lazada, which was acquired by Alibaba, and Tokopedia, which Alibaba invested in. In 2013, when OPPO entered Indonesia, e-commerce accounted for only 0.5% of total retail sales in Indonesia, and the development was slow. Even in 2015, when Jitu was founded, Indonesia's online shopping revenue was only $4.49 billion, accounting for 0.8% of retail sales. As a natural infrastructure for e-commerce, the express delivery industry is in its infancy.
Li Jie deeply felt that the efficiency of Indonesian logistics and transportation was extremely low, and he also found entrepreneurial opportunities. In 2015, at the OPPO R7 Indonesia press conference, Li Jie announced that he would step down as CEO of OPPO Indonesia and devote himself to a new business - J&T Express (Jitu Express).
"Now, Ov (OPPO, vivo) has almost 20,000 points of sale in the whole of Indonesia." According to IDC data, OPPO and vivo together occupy more than 40% of the market share of the Indonesian smartphone market. Indonesia's annual smartphone sales have exceeded 60 million units, which means that Ov alone can sell more than 24 million units in Indonesia. The polar rabbit with Ov on its back can be said to have been born with a golden key.
"Actually, Pole Rabbit and Ov are one system." Jiang Weiwei said, "Jitu is actually grown on the Ov distribution system, originally they need to deliver mobile phones such as high customer unit price goods, incidentally made a logistics system out, in the logic is established." ”
"Ov sinks very badly in Southeast Asia, and in a small town where two roads meet, you can see Ov ads at intersections. In 2017, I learned that Jitu can already achieve a single volume of 7.8 billion yuan per year. Jiang Weiwei attributed J&T's development in Indonesia to Ov's strong dealer network on the one hand, on the other hand, she believes that Jitu caught up with the opportunity of Indonesian e-commerce development: "At that time, the e-commerce penetration of the whole Southeast Asia was very low, and the express delivery system was from scratch. ”
In 2016, Indonesian President Joko Widodo proposed a policy line to vigorously develop e-commerce. At present, the market size of Indonesian e-commerce is doubling, and the data shows that Indonesia's e-commerce market will exceed $30 billion in GMV in 2020 and is expected to reach $83 billion by 2025.
"Now in Indonesia, J&T and JNE, a local logistics company founded in 1990, are about the same size, and are the two largest logistics companies in the region. J&T transports a mobile phone from the capital to the provincial capital to the store, the freight costs almost 20 to 30 yuan a single, and the shipping is cheap, almost 2 to 3 yuan. The above-mentioned OPPO agent revealed, "Unlike the domestic requirements for timeliness, indonesian customers can still accept 5 days after the order." ”
Lion-like ambition
Southeast Asia can no longer satisfy the ambitions of this "rabbit".
In March 2019, Rao Guorong, CEO of Longbang Express, posted: "The development of Longbang in the previous year also encountered financial problems, but fortunately, in May last year, an investment group was introduced to carry tens of billions of funds into China to develop express delivery networks and express transportation networks. ”
No one could have imagined that the acquirer was a "rabbit" born in Southeast Asia, and that this "rabbit" had lion-like ambitions. In September 2019, Jitu acquired through the acquisition, "backdoor" Longbang Express to obtain a license. Soon, Jitu copied the Southeast Asian model in China, transforming Chinese OPPO dealers into franchisees of Jitu.
In addition to the tilt of Ov resources, Pinduoduo is also indispensable in the development of Jitu.
"Prism" reported that more than 90% of the single volume of the early pole rabbit came from Pinduoduo, and it was also very concerned about the sinking market, cleverly choosing low-tier cities as a breakthrough, and because Li Jie and Huang Zheng both had a good relationship with Duan Yongping, there was doubt about the relationship between Pinduoduo and Jitu on the market, and some people thought that Pinduoduo and Jitu had a synergistic relationship.
After a year of speculation, in April 2021, Pinduoduo issued a statement on the merchant version of the APP, clarifying that there is no special cooperation and no investment relationship with Jitu. Indeed, from the perspective of the market, subsidies and low prices are the core reasons why Jitu has swept the market. After jitu started the network, it not only connected to Pinduoduo, but also connected to 11 e-commerce platforms such as Dangdang. Now, through the acquisition of Best, Jitu has officially entered the Ali rookie system.
"Jitu's playing style is very similar to Pinduoduoduo, a set of hits to the lowest price, without considering the way of profit. In a prefecture-level city in Jiangxi, their price is basically around 1 piece 5, but the pole rabbit is basically 1 piece 2, if you send 1 million pieces a day, this number is very scary, low three cents a day is cheaper hundreds of thousands. Jiang Weiwei gave an example.
According to the "Late Post" news, during the "618" period in 2021, the daily single volume of Jitu once exceeded 30 million. Since then, the daily order volume of Jitu has declined, and it is currently stable between 22 million and 25 million orders. It is widely said in the industry that in 10 months, the subsidy loss of Jitu reached 20 billion yuan. Li Jie, on the other hand, was mentally prepared before the price war began, and he once told franchisees that he would not make money for two years.
"Pole rabbit into the domestic market, take the price of the people route, the purpose is to seize market share, including the low-price route to explore the bottom after turning to mergers and acquisitions is also the same purpose, after the total amount is reached, can adjust the integration of resources more, just like the old saying 'quantitative change caused by qualitative change', of course, this requires the pole rabbit to practice the internal internal strength of resource integration." Xu Yang said.
Jitu Express has become a catfish that stirs up the express delivery industry, bringing about a low-price trend in the express delivery industry. According to data from Huatai Securities Research Institute, the average unit price of the logistics industry fell from 24.57 yuan / piece in 2010 to 10.55 yuan / piece in 2020, and continued to decline to 10.21 yuan / piece in January 2021. In 2020, the single ticket revenue of the express delivery industry will fall by 10%, and the average decline in the single ticket revenue of tongda, Best and SF will be 20% to 30%, but the decline in the unit cost of the express delivery industry can only be maintained at 10% to 20%.
In the end, the bloody contest ended with the Yiwu Post Office issuing fines to Jitu and Baishi for low-price dumping. The Regulations on the Promotion of the Express Delivery Industry in Zhejiang Province adopted by the Zhejiang Provincial Government stipulate that express delivery operators shall not provide express delivery services at prices below cost, and platform-based express delivery operators shall not prohibit or attach unreasonable conditions to restrict the entry of other express delivery operators.
"Barefoot people are not afraid to wear shoes, first tear down everyone's profits." Since the pole rabbit wants to be so brutal, although the original bosses have gone ashore, they also started by brute force, and they really put down their value to fight a bad war, and who can win is still uncertain. A courier practitioner said.
In July 2021, Yimi Dida announced that it has reached a strategic investment cooperation with Shanghai Huisen Zhilian Express Co., Ltd. (hereinafter referred to as "Huisen"). Huisen holds four brands of Huisen, Huilin Fengtong, Yimi Dida and Yousu, and its founder is Rao Guorong. It is worth mentioning that there is also a figure of Jitu behind Huisen: the legal representative of a company under Huisen also serves as a supervisor of Tianjin Binshan Supply Chain Management Co., Ltd., and the legal representative of Tianjin Binshan is also a supervisor of Jitu International and an executive of BBK Real Estate. So far, after relying on large-scale capital acquisitions and low-price subsidies, Jitu has gradually built its territory in China.
However, enterprises can cover up their inherent deficiencies when they are developing rapidly, and if they slow down, their shortcomings will be exposed.
Photo: Deng Pan
At present, the warehouse allocation of Jitu is far less than that of SF, JD.com, Zhongtong and other competitors who have been deeply cultivated for many years, tiger sniffing has reported that when the pressure of "Double 11" was high, Jitu moved several times because of logistics land problems, and the cost of renting land, price increases and moving were very high. In addition, after the acquisition of Baishi and other operations, Jitu urgently needs to integrate tens of thousands of outlets under the company, which is not small.
Looking at overseas, although Jitu is also ambitious, in fact, the domestic logistics war is glued, and many domestic logistics giants have also begun to target overseas. At the end of the third quarter of 2021, SF completed the acquisition of Hong Kong-listed Kerry Logistics; Cainiao was regarded as the infrastructure project of Alibaba's overseas strategy by Daniel Zhang. From this point of view, this overseas battle is not easy for Ji Rabbit to fight.
(Xu Yang and Jiang Weiwei are pseudonyms in the text)
Reference Articles:
1. "Jitu Express Completes a New Round of Financing for Expanding the Middle East and Latin American Markets", Late Post
2. "Jitu Li Jie, the largest express delivery company in Indonesia in four years", Haitou Global
3. "Savage Extreme Rabbit, Big War Express "Big Brother"", open pineapple finance
4. "A price war of the pole rabbit has dragged the express delivery industry into a quagmire", the market value list
5. "Pole Rabbit Marches into Latin America, Blood War Express Jianghu, Mysterious Boss Appears", E-commerce Newspaper
#极兔 #