Per reporter: Chen Ting Per editor: Liu Xuemei
With Aneng Logistics grabbing the "first share of Hong Kong stock express", the fierce competition in the express market is turning from dark to bright. Today, Zhongtong Express has added another fire to the competition in the express market that tends to be white-hot.
On December 29, ZTO Express announced the completion of more than 300 million US dollars in B round financing, ZTO Express said that after this round of financing, it will further increase investment in information system research and development and new infrastructure construction, accelerate the construction of professional talent echelons, and consolidate and expand the good development trend.
Previously, Zhongtong Express completed Series A and Series A+ financing in June 2018 and May 2020 respectively, with a total investment of more than US$100 million.
In the industry, Zhongtong Express is more regarded as a latecomer, compared to the establishment of 11 years of Aneng Logistics, born in 2016 is not too early, but in recent years has achieved rapid development.
In August 2018, just two years after its establishment, Zhongtong Express has achieved a single-day cargo volume of more than 10,000 tons and entered the "10,000-ton club". As of July 2021, ZTO Express has more than 13,000 service outlets, 72 distribution centers, more than 3,200 self-owned transport vehicles, and a daily transportation capacity of 45,000 tons.
According to the latest statistics of industry research institutions, in terms of the performance of the whole year of 2020, the revenue of Zhongtong Express ranks sixth in the "2021 China LTL Top 30 Rankings" of the whole network express, and the cargo volume ranks fifth after Aneng Logistics, SF Express, Yimi Tick, and Best Express, basically ranking among the first echelon of express transportation.
The next step of Zhongtong Express is obviously to further impact the head pattern of the industry. In 2019, Lai Jianfa, chairman of Zhongtong Express, said that its goal is to achieve the top three in the industry in terms of business volume within 3 years, and plans to be listed independently in the future. As early as 2017, at the beginning of the opening of the Network of Zhongtong Express, it shouted out the slogan of "within 5 years" independent listing.
Nowadays, there is only one year left before the two major goals set by Lai Jianfa, backed by Zhongtong Express, where is the core competitiveness of Zhongtong Express? What impact will the accelerated Zhongtong Express have on the industry?
From "de-express" to "service is king"
Although it is backed by Zhongtong Express, at this stage, Zhongtong Express is not high with Zhongtong Express in terms of franchisee overlap.
In September 2021, Lai Jianfa said in an exclusive interview with the media that the biggest change in ZTO Express since its establishment is "de-express delivery". He said that Zhongtong Express has been a national network from the beginning of the layout, and it took only 10 months to complete the national network construction. In the early days of the network, the overlap between the franchisees of the two networks of Zhongtong Express and Zhongtong Express was as high as 90%.
However, due to the realization that "express delivery" and "express transportation" are two concepts in the process of exploration, on the first anniversary of the establishment of Zhongtong Express, the "de-express delivery" began. According to Lai Jianfa, Zhongtong Express has reduced the overlap of franchisees in the two networks to less than 20%.
Lai Jianfa also said that it is the optimization of the grid structure that has helped Zhongtong Express maintain a high growth rate to a certain extent, "We only took 2 years to complete the single-day cargo volume of more than 10,000 tons." In the past five years, in terms of scale, a total of 15.8 million tons of business has been completed, with a compound annual growth rate of 52%. ”
Today, ZTO Express has completed more than $300 million of Series B financing, and how to use this $300 million of financing will have a far-reaching impact on its future market position. Judging from the recent actions of Zhongtong Express and the external expression of Lai Jianfa this year, the improvement of efficiency is the focus of its current stage.
Lai Jianfa said this year that next year, Zhongtong Express expects more than half of the distribution centers to be equipped with automation equipment.
"At present, in the structure of Zhongtong Express goods, the average weight of tickets is about 100 kilograms, of which about 20% are e-commerce parts. In this case, the automation equipment can greatly improve efficiency. In the past, it took more than 3 hours for a 17.5-meter car to unload, and the key was that it took 1 to 2 hours to sort after unloading. Now, by adopting automation technology, unloading and sorting can be completed in less than 1 hour, and the efficiency is significantly improved. Lai Jianfa said in an exclusive interview with the media.
At the same time, Lai Jianfa also stressed the importance of "service is king", and said that next, enterprises will concentrate on deepening and thoroughly serving. It is understood that this year, Zhongtong Express launched the "assured delivery" of aviation time-sensitive parts and promised services.
The development direction of Zhongtong Express coincides with the general trend of the overall express industry. Industry insiders said that the fast running industry has entered the second half of the competition, compared with the scale growth as the key to the first half of the competition, refined operation and digital level has become the key point of victory for future express companies.
Backed by Zhongtong, is Zhongtong Express more advantageous in the second half of the competition in the express industry?
Xu Yong, vice president of the Express Branch of the Transportation Association, told the "Daily Economic News" reporter that in the long run, Zhongtong Express has a development plan to become bigger and stronger, and sharing with customers of Zhongtong Express has also greatly reduced the marketing cost of Zhongtong Express to find customers. In Xu Yong's view, the application of digital technology is expected to greatly improve the efficiency of the operation of express companies and reduce operating costs, while ZTO itself has a certain accumulation in digital technology.
Driving into the express market "Battle of Kings"?
Since 2016, ZTO has begun to build its own ecology. As a key member of the ZTO ecosystem, the layout of ZTO Express is obviously one of the key fabrics for ZTO to face the future.
Lai Meisong, chairman and CEO of Zhongtong Express Group, has stressed the importance of ecological competition.
"The future competition of express delivery must not be the competition of express delivery, it must be the competition of the whole link, it must not be a single fight, but a 'group fight', because only when your format is richer, your resources will be fully utilized in the entire logistics sector." Lai Meisong has said.
For the financing news of Zhongtong Express, Xie Xiaowen, a special researcher of the China Logistics Society, told the "Daily Economic News" reporter that the integration and development of express delivery and the transformation to express transportation is an important development trend of head enterprises, and Zhongtong is no exception. "With the help of capital power, express logistics enterprises can seize opportunities in a timely manner, realize market expansion and merger integration, make their business bigger and stronger, maintain competitive advantages, and achieve greater development." Xie Xiaowen said.
It can be said that the last time the list of express delivery companies stemmed from the prosperity of e-commerce, today, with the decline in the growth rate of e-commerce volume, the dividends overflowing by e-commerce are shrinking, in contrast, with the transformation of China's consumer Internet to the industrial Internet, as a key infrastructure to help the upgrading of the industrial Internet, the express market is expected to enter a stage of rapid growth.
According to iResearch data, China is the world's largest LTL market, about 5 times the US market, and the industry size is 1.5 trillion yuan. However, as of 2020, China's LTL market is still highly fragmented, with the CR10 only 5.7%.
A wave of listings in the express industry may be coming.
PwC analysis believes that due to the impact of the industrial Internet boom and the reform of the capital market, more and more investment institutions have shifted their investment focus to the 2B field and extended to the logistics industry. After the epidemic, benefiting from the continuous online sales of large-scale commodities such as home appliances, furniture, and home improvement, LTL express companies may continue to become a hot area for investors to pay attention to, and the head companies will continue to attract investors' attention and land on the capital market.
In this context, Aneng Logistics has been hong Kong stocks ringing the bell this year; in addition, including SF Express, Best Express and One Meter Tick and other companies, have successively revealed their intention to list, in the fierce market competition, whether Zhongtong Express can "further" in the market position, it is still an unknown.
Xie Xiaowen said that the ability of express transportation companies to occupy the core of the market is to make full use of trunk transportation and accurately control transportation capacity. Regarding the acceleration of Zhongtong's efforts in the express transportation market, Xie Xiaowen believes that it is necessary to strengthen strategic cooperation with the China Railway Express Company, the main body of the national railway express logistics business, accelerate the innovation and development of the public to railway of white goods flow, make good use of the railway trunk line transportation capacity, and realize the large-scale development of express logistics.
"That is to say, whoever makes good use of the railway transportation resources and creates a fast logistics model that adapts to market demand, conforms to the development trend, and meets the win-win development, who will be the king of the future." Xie Xiaowen said.
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