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Wen 丨 financial story club, the author 丨 chapter unscrupulous
"A little mobile phone, express delivery to home" - undoubtedly a portrayal of the lives of most people today. From furniture and appliances, small to daily necessities....... Through convenient and fast express logistics, they "fly into" the homes of ordinary people across the country.
Even during the Spring Festival when hundreds of industries are suspended and thousands of families are reunited, the courier company does not close, and the delivery of riders does not stop.
Express delivery, as the most active segment of the logistics industry, the business volume has been soaring. According to statistics, in 2021, China's annual express delivery business volume exceeded the 100 billion mark for the first time. In more than 7 years, China's express delivery business has completed a major leap from the "10 billion piece era" to the "100 billion piece era", and now accounts for more than half of the world's total.
Behind the eye-catching growth data, there is an embarrassing reality:
In 2021, the top eight companies in China's express delivery business volume will exceed the UPS single volume (joint parcel), but the market value of the enterprises will not be as good as that of UPS. This phenomenon is ultimately due to the lack of operational capacity and profitability of enterprises, as well as the "low concentration" and "high internal volume" of China's express delivery market. Under the high degree of inner volume and price shopping, the operating costs of enterprises are rising, and the profit margins are as thin as white blades. The profitability of China's express delivery companies has fallen to a very low level in the past two years - the net profit margin of the head enterprises of the Tongda department has dropped below 5%, and the net profit center of a single ticket is only about 0.1 yuan.
In contrast, the U.S. express delivery industry is highly concentrated, with the total volume share of 1 state-owned enterprise (USPS) + 2 private enterprises (UPS and FedEx) accounting for more than 90%. After more than 150 years of development and integration, the current pattern of the US express delivery industry is monopolistic and very stable. Profitability is significantly higher than that of Chinese companies, and the profit level of UPS per piece even reaches 10.21 yuan, which is about 10 times that of domestic express delivery.
Chinese express delivery company CR8 (the concentration of the top eight manufacturers is about 80.8%) is even lower than the CR3 of the United States and Japan (85%-90%). Among them, Zhongtong has the highest market share, but it only accounts for 20.6% (see Chart 2).
Overall, China's express delivery companies are large but not strong, and the industry is still in the stage of high internal consumption - no one in this market has a better life.
The "price war" subsided, and the merger and acquisition drama began
2021 is an important inflection point for the express delivery industry. While entering the "era of 100 billion pieces", the "price war" that has lasted for many years has subsided under regulatory intervention, the drama of mergers and acquisitions integration, financing and listing has been continuously staged, and the industry competition pattern has been deeply reconstructed.
Supervision has become stricter, and price shopping has been extinguished
However, the volume of express delivery business has grown by leaps and bounds, but it has not brought about a synchronous growth in business revenue. The data shows that from January to November 2021, the business volume of express delivery service enterprises nationwide increased by 32.3% year-on-year, while the year-on-year growth of business revenue was only 19.6%.
Major express delivery companies are trapped in the dilemma of "increasing revenue without increasing profits", which is obviously the "evil result" of the long-term price war.
Since the beginning of 2021, in order to seize market share, major express delivery companies have competed to suppress prices, and the price war has intensified.
For a long time, Yiwu has been the "barometer" of the mainland express delivery market and the main battlefield of the price war. Taking Yiwu as an example, in March 2021, the express delivery "price war" was glued in Yiwu, and the receiving price was rushed to "one piece of two-hair nationwide", and the lowest price even fell below the 1 yuan red line again, and there was a vicious competition of "eight hairs nationwide", almost at a loss to send express delivery.
"Using money-burning means to 'consume' competitors is tantamount to killing eight hundred enemies and losing a thousand, and in most cases it is a lose-lose situation." Some insiders said.
Disorderly low-price competition has attracted regulatory attention. With the intensive introduction of regulatory "combination fists", the chaos of vicious low-price competition has been curbed, and since the second quarter of 2021, the single ticket price of express delivery companies has gradually begun to repair. At this point, the "price war" that has lasted for two years tends to be extinguished.
Jitu acquired Baishi, and the industry pattern changed
Looking back at 2021, in addition to the price competition of the industry, express delivery companies also have no shortage of mergers and acquisitions.
On October 29, the "express delivery dark horse" Jitu announced the acquisition of Best's domestic express delivery business for 6.8 billion, which changed the pattern of the express delivery market.
For a long time, the express delivery industry has maintained a stable pattern of "four links and one reach" plus SF, and in the future, "three links, one reach and one rabbit" plus SF's express delivery may become possible.
According to the comprehensive data of the State Post Bureau, the market share of the head enterprises in 2021 is: Zhongtong (20.6%)> Yunda (17.0%)> Yuantong (15.3%)> Jitu Baishi (about 14%) > Shentong (10.2%) > SF (9.7%) > Postal EMS (about 9.2%).
It is worth noting that in 2022, if the integration of Jitu and Baishi is smooth, it is expected to significantly increase market share and scale effect, more than 40% of the volume of Best Express comes from Ali e-commerce, Jitu is expected to access Ali's domestic e-commerce platform through Baishi to expand long-term space, and the Jitu, which was allied with Pinduoduo in the past, can also hold hands with Ali.
With the continuous increase of express delivery business volume, the express delivery industry has also entered the stage of giant hegemony, and there is a great challenge in how the "very fast running" Jitu will "compete on the same stage" with other express delivery leaders.
From the perspective of business volume, mainstream express delivery companies compete in two camps. According to the prediction of "Express Magazine" in 2021, after the acquisition of Baishi by Jitu, the volume of Zhongtong, Yunda, Jitu Baishi and Yuantong will be between 17 billion and 22.3 billion pieces, and 4 express deliveries will form the first echelon of pieces. Subsequently, Postal, SF, Jingdong Logistics and Shentong estimate that the total volume of pieces in 2021 will be within 11 billion pieces, forming the second echelon. The former leads by quantity, and the latter wins by quality.
From the perspective of revenue capacity, from the perspective of the financial reports of the seven companies that have released detailed data, SF has the best revenue in 2021, and in the first to third quarters, it has continued to grow, and it is about 1.8 times that of the sub-Jingdong Logistics. In the first to third quarters, JD Logistics nearly doubled the third place of YTO.
Yuantong and Yunda, which have a similar market value, also have similar performance in revenue, and both maintain an increasing state, with revenue between 8 billion and 10 billion yuan. Best and Zhongtong are in the same echelon, with revenue between 6 billion and 7.5 billion yuan. Shentong ranked last, with revenue between 5 billion and 6 billion yuan.
Seeing this, it is inevitable that some people will wonder: Why is Zhongtong, which has the highest market share, lag behind the old two and the third in terms of revenue?
The reason is that Zhongtong is the only company in the "Tongda System" that has not included the dispatch fee in the revenue, and Yunda has followed the example of Yuantong and Shentong after 2019 and included the dispatch fee in the revenue. Strictly speaking, the practice of including the dispatch fee into the revenue is usually to whitewash the statement, after all, the delivery fee is collected by the sender's outlet, and then paid to the recipient's outlet after the courier platform changes hands, which has little impact on the actual operation, but it pulls up the revenue data on the book.
According to the public data of the financial report, in the first three quarters of 2021, only Zhongtong, Yunda and Yuantong continued to maintain profitability, of which Zhongtong had the highest total profit of 2.954 billion; Yunda and Yuantong were 781 million and 954 million yuan respectively. The net profit of Shentong and Best continued to be negative, with total profits of -239 million yuan and -1.726 billion yuan, respectively. After experiencing losses in the first quarter, SF began to recover profits in the second and third quarters and make up for the losses in the previous quarter.
In the past few years, the profit margin of express delivery companies has continued to decline, and 2021 has been at the bottom of history, and it is expected that the profitability of e-commerce express delivery head enterprises will be repaired in 2022.
"National team" in the game? A false alarm.
According to the news on December 6, with the approval of the State Council, The China Logistics Group, a new central enterprise with integrated logistics as its main business, was formally established.
As soon as this news came out, it shocked the entire logistics industry, because the restructuring lineup of China Logistics Group was very strong, in addition to the top 100 logistics companies of China Chengtong Holding Group, it also introduced China Eastern Airlines Group, China COSCO Shipping Group, China Merchants Group, etc., which basically covered the logistics and transportation of sea, land, air and ports.
This means that China Logistics Group will become a super giant in the logistics market that can "go to heaven, go to the sea, and land". Many people are curious, will this "medium-sized" logistics company get involved in the domestic express delivery market? Do you want to get a piece of the massive e-commerce express business?
In fact, the answer is no. At the media briefing on the structural adjustment and restructuring of central enterprises held by the State-owned Assets Supervision and Administration Commission on August 25, Weng Jieming, deputy director of the Office of the Leading Group for the Reform of State-Owned Enterprises of the State Council, said that the restructuring of central enterprises in the logistics industry aims to optimize the layout of the warehousing and logistics network of bulk commodities, form a whole chain of bulk commodity warehousing and logistics system, and make up for a short board in China's modern logistics industry.
Therefore, China Logistics Group will most likely not set foot in the domestic small-piece express delivery market, and its positioning is mainly to undertake the role of warehousing and transportation of bulk commodities, professional integrated logistics services and global supply chain organizers for the national economy and people's livelihood.
Mergers and acquisitions continue, and the pattern is reshuffled
Last year, Swol express opened bankruptcy reorganization, and daily express announced a comprehensive transformation and upgrading... More second-tier express delivery companies have gradually been cleared, the express delivery business has accelerated to the head enterprises, the express delivery industry has continued to shuffle, and the competitive landscape has changed.
Strong supervision continues, and competition is becoming benign
From disorderly competition in the industry to healthy competition, it has always been the direction of the market supervision department.
Outside the market, the direction of policy and supervision may be further extended.
Overall, industry regulation will become more precise, comprehensive and effective in 2022. First, it can better reflect the will of the state in a timely manner, and anti-monopoly, common prosperity, harmony and stability, and high-quality development are the starting points of industry regulatory policies. The second is to more accurately position the power of the city, the new and old price depressions are both pronged, crack down on vicious competition and promote high-quality development.
In the context of stricter industry supervision, has the "price war" of express delivery entered the end in 2022?
Zhao Xiaomin, deputy director of the Postal Express Special Committee of the Shanghai Communications Commission and an expert in the express delivery industry, believes that the "price war" of express delivery has reached a critical point, and no matter how much the price is reduced, it will not be able to increase market share, and even miss the last development opportunity.
Affected by the industry's "price war", the net profit of industry players in 2021 generally declined, half of the enterprises suffered losses, some express delivery outlets broke out a systemic crisis, there was a phenomenon of arrears of wages, bankruptcy, running away, etc., disorderly "inner volume", if not intervened, it will inevitably make the entire industry fall into a vicious circle.
In this regard, many research institutions believe that the supervision of relevant departments will be further strengthened. Considering the substantial changes in the competition pattern, as well as the impact of profit repair of enterprises and franchisees and the weakening of the influence of upstream e-commerce platforms, the competition in the industry will slow down in 2022.
Similar to Yiwu's regulatory policies in 2021, perhaps pushing more cities in 2022, malicious competition will be hit.
Giants are rampant, mergers and acquisitions or continuations
At the beginning of 2021, SF launched the first shot of "mergers and acquisitions", and the official announcement will spend TENS of billions of Hong Kong dollars to acquire a majority stake in Kerry Logistics.
Entering the second half of the year, the M&A story in the logistics industry continues. On July 30, 2021, Yimi Dida announced that it has reached a strategic investment cooperation with Huisen Express, and the two sides will accelerate the upgrading of the existing logistics network of both sides through in-depth resource synergy and complementary advantages; at the same time, the two sides will work together to focus on the layout of smart logistics and globalization, and actively explore the practice of "going to sea" of smart logistics network.
In 2022, the story of mergers and acquisitions may continue to play out.
One signal is that in the "Notice on the Top 50 Chinese Logistics Enterprises and Top 50 Private Logistics Enterprises in 2021" issued by the China Federation of Logistics and Purchasing on January 7, the threshold for the top 50 private logistics enterprises reached 1.07 billion yuan, an increase of 200 million yuan over the previous year.
Therefore, we judge that the strong reshuffle of China's express delivery industry will continue to advance in the next 1 to 2 years.
Homogenization is difficult, and service layering will accelerate
Looking back at the history of the development of China's private express delivery, taking the Tongda express delivery company as an example, in the past few years, the competitive situation has been changing, and some of them have occupied a short-term competitive advantage, but in the glued e-commerce express delivery market, a high degree of homogenization has made it impossible for a company to stand out.
In the past, a considerable number of express delivery companies were carried forward by the rapid growth of the industry, and their development model was rampant, getting bigger and bigger, involving more and more wide areas, and taking the road of heavy pattern and light operation of share competition.
In 2022, express delivery will develop vertically, "differentiated competition" will become the new normal, and hierarchical, diversified, customized and personalized express delivery products will be favored by the market.
The sensitive have moved first. For example, YTO launched "Yuanzhunda", and ZTO launched express delivery products such as "Exclusive Parts" and "Star Link", which is a useful exploration of "product classification and service layering".
In view of the differentiated demand of consumers for express delivery services, the national policy has put forward the requirements of "promoting the stratification of industry services and preventing unfair competition" for China's express delivery industry, which has entered the "era of 100 billion pieces", which has accelerated the advent of the era of upgrading and stratification of express delivery services.
Don't be a price war, a "value war"
"Anti-internal volume" and "high-quality development" will be the main tone of the express delivery industry in the next few years.
With the tightening of supervision, the express delivery industry is trying to get rid of the "inner volume" quagmire and actively choose to upgrade from price war to value war.
For example, service and environmental protection will play an important role in the future competition. "This is not empty talk, it is already obvious that if the service cannot keep up or is complained about, it will face some hard constraints," said Zhou Huande, director of the Postal Express Professional Committee of the Science and Technology Commission of the Shanghai Municipal Transportation Commission.
Take "express delivery is difficult", according to the relevant national regulations, "pre-delivery electricity union" and "home delivery" should be the obligations of express delivery service providers. The reality is that the delivery of express delivery has become an "unspoken rule of the industry", and home delivery has become a "high-end service" in the industry.
In 2021, Time Post magazine conducted a questionnaire survey of 1420 respondents, of which nearly 80% said that they had encountered the phenomenon of express delivery being "signed". "Couriers don't deliver to your door" has become the norm.
Many consumers believe that couriers do not come to the door because of "laziness", and the real reason is more than this.
Under the long-term price war, the profitability of enterprises has dropped sharply, the profits of franchisees are not as good as before, and the layers of pressure are transmitted to the end of the express delivery, and problems such as door-to-door difficulties occur.
In the face of the "long-term cure" of the industry's stubborn disease, the regulatory authorities are finally going to intervene.
On December 3, 2021, Ma Junsheng, director of the State Post Bureau, stated that the current problem of unbalanced and insufficient development of the postal express industry is becoming increasingly prominent, the industry is large in scale but not high in quality, and the development speed is fast but the advantages are insufficient. He pointed out that it is necessary to take a clear stand against "internal volumes", prevent unfair competition, and oppose acts that harm the interests of the industry and the interests of employees.
Immediately after January 7, 2022, the State Post Bureau studied and drafted the "Measures for the Administration of the Express Delivery Market (Revised Draft)" for public comment. This indicates that "from high quantity to high quality development" has become an inevitable part of the express delivery industry, and the industry will gradually enter the stage of high-quality competition in 2022.
As Lai Meisong, chairman of ZTO Express, said: "We must have a 'zero' mentality, because China Express is striding towards a new journey of 'from high quantity to high quality'." ”
Overall, under the policy support of 2022, the unit price of express delivery has begun to stabilize, the underlying logic of the vicious price war no longer exists, switching to a new channel of value war, and the growth inflection point of the express delivery industry has appeared; at the same time, the merger and acquisition drama will continue, and the industry pattern is far from reaching the end.