Source | Yunlian Think Tank (ID: tucmedia), author | Cao Li, Editor | Small L
In 2015, ZTO Group launched the "One Body, Eight Wings" full-link development plan, namely the integrated logistics ecological construction plan of "ZTO Express + International, Express, Commercial, Cloud Warehouse, Aviation, Intelligence, Finance and Media". Today, with the business completion volume of 22.3 billion votes in 2021, ZTO Express has become the world's first express delivery company with an annual business volume of more than 20 billion, ranking first in the industry's business volume and exceeding 20% market share.
At the same time, in the "2021 China LTL Revenue TOP30 Ranking" released by the Transport Research Institute, Zhongtong Express ranked sixth in the whole network express with an operating income of 4.05 billion yuan, and ranked fifth with an annual volume of 6.52 million tons of LTL. Since its inception in 2016, Zhongtong Express has achieved profitability for three consecutive years and accelerated its approach to the head camp.
At this point, we can find that whether it is the development process of Zhongtong Express or Zhongtong Express, it has staged the drama of "latecomers coming first".
In 2020, ZTO launched the "cold chain" ecological construction. From April 2021, Zhongtong Cold Chain opened the national investment to join, and at the end of July, the national network operation was officially launched. By the end of 2021, Zhongtong Cold Chain has established 26 provincial-level management centers, 28 distribution centers, more than 280 outlets, and more than 180 services covering cities; 145 trunk line double-temperature transport vehicles, and 19 online information systems.
This net speed of the Zhongtong cold chain can also be seen. Nowadays, Zhongtong Cold Chain has joined the ranks of laying out the "national network" of cold chain, and wants to build China's largest integrated logistics network of warehouse dry distribution - "Zhongtong Blue Network". So as another "latecomer", will the same story continue to play out?
1. Copy the speed of "Zhongtong Express"?
Since April 2021, Zhongtong Cold Chain has begun to comprehensively lay out the construction of the "blue net" across the country and start the work of attracting investment to join. Starting from Guangzhou, it has successively launched investment promotion in Chengdu, Wuhan, Zhengzhou, Beijing, Nanning, Quanzhou, Shandong, Xi'an, Shenyang and other places, from the place of origin to the hub, one route south to north. By July 2021, ZTO Blue Network has completed the basic structural deployment as planned, 30 provincial management centers have been basically established, and the coverage rate of districts and counties nationwide has reached 60%.
This efficient network distribution speed benefits from the advantages of the express delivery network that has been precipitated for many years, and also benefits from the innovation in the operation mode of zhongtong cold chain.
On the basis of continuing the core of the franchise model of Zhongtong Express, Zhongtong Cold Chain adopts the "direct operation + franchise" model, that is, "operation direct operation, operation franchise". On the one hand, Zhongtong Cold Chain will undertake more heavy asset layout (such as venues, vehicles, equipment investment corresponding to carrying temperature control, etc.); on the other hand, it can ensure the service quality of the whole link and can be controlled in accordance with the mode of standard product production. To be precise, it is necessary to ensure the continuous improvement of control and service standards, while also maintaining the flexibility and convenience of the franchise model.
Yang Fan, vice president of Zhongtong Cold Chain, pointed out to the Yunlian Think Tank that the core of the Zhongtong cold chain franchise system has two characteristics: one is rapid scale, and the other is a reasonable profit sharing mechanism.
Yang Fan, vice president of Zhongtong Cold Chain
Yang Fan said that the express delivery network and the cold chain network are two different concepts, which seem to be similar on the surface, but in essence there are still differences. Express delivery is essentially the consumer logistics at the end of the service supply chain; and the cold chain is based on the link design of the entire supply chain, by changing the traditional distribution link of food freshness to the retail end, the more subdivided warehouse dry distribution integration, the last kilometer into the entire network construction. Specifically:
First, the customer base has changed.
More than a decade ago, the sales channel of the traditional manufacturing and processing industry was a "provincial capital economy" model, and each province would have a professional market for subdivisions. Under the rapid development of express delivery for many years, this professional market has been replaced, and the place of origin has begun to industrialize and centralize. This changed the original sales channels, and orders turned more online and entered the new retail sector.
The target group of Zhongtong cold chain is to activate this part of the customer who has transformed traditional sales into new retail. Among them, the upstream end tends to be small and medium-sized food processing plants, large traditional customers, professional markets and ports that convert to new retail; the end tends to serve the C-end, as well as small B customers in the new retail sector (including chain catering, fresh supermarkets, community group buying, etc.).
Second, there is increased demand.
When e-commerce first emerged, more categories such as clothing, mother and baby, and 3C categories were sold, and there was no demand for "reprocessing" of these products. Unlike fresh products, a large part of fresh products need to be "reprocessed". Consumers want a better consumer experience, including ensuring that food is fresher and more refined. For example, if a cow is processed in parts, grades, and different ways of eating, consumers may want to buy steaks, beef rolls, etc. Therefore, the "reprocessing" characteristics of fresh products also bring more demand to cold chain transportation.
Third, cold chain products are more of a standard.
In the past, the circulation of meat products was to hoist pork and mutton with hooks and put them into the car for transportation. Now, with the tightening of market supervision and the improvement of industry standards, meat products are packaged in cartons and other standard products, and the weight is basically around 10-20 kg, and some are even compressed to less than 10 kg. Therefore, the standard cold chain transportation products that are currently in normal circulation have turned to pre-packaging.
As a network-based platform enterprise, Zhongtong Cold Chain has launched a total of six major products, namely express delivery products, express delivery products, cloud warehouse products, semi-finished products, commercial products and financial products. These six products also release the supply chain-based demand of the entire food fresh field.
2, sustainable development, cost control is still king
Looking at the cold chain logistics track, although its attractive development trend has attracted many giants, capital and cross-border people to enter the market, the pain points it currently faces are still very obvious.
With the increase of some paying entities (milk tea shops, convenience stores, fruit shops, catering stores, etc.), coupled with the high cost of cold chain, consumers are unwilling to pay for expensive transportation costs, and cost reduction has become the main trend of the current cold chain industry.
Of course, this is also the driving force behind the cold chain network. As long as we can spread our own cold chain outlets throughout the country, we can further shorten the distance from the production end to the consumer end, and finally establish our own advantages in price and scheduling.
The low concentration of China's cold chain logistics industry and the characteristics of regional distribution make it natural for enterprises to divide into three-stage services of "collection, warehouse and distribution" when serving customers. In view of the existence of multiple subjects in the current cold chain system, Yang Fan said that on the one hand, zhongtong cold chain adopts the "warehouse dry distribution integration" mechanism, which changes the service composed of multiple subjects into a door-to-door service with full link integration. In this way, it can not only reduce the loss of customer multi-link turnover, but also compress the gross profit in the original multiple subjects and links and release it to consumers and manufacturers.
On the other hand, due to the inability of regional cold chain logistics enterprises to build intensive and large-scale advantages, and the development of automation is relatively backward, cold chain transportation is still mainly completed by manpower, which is very dependent on the subjective judgment and operating habits of employees. Nowadays, the upgrading of cold chain supporting facilities has become the key to reducing the loss rate and improving the quality of ingredients. Zhongtong cold chain will continue to increase investment in digital intelligence and automation to compress the cost of cold chain logistics.
Controlling costs is the gene engraved in the bones of Zhongtong. Whether it is a venue or a vehicle, Zhongtong is self-built and self-operated. Therefore, assets can be changed according to different time stages and different needs, and reasonable allocation can be made.
In addition, Yang Fan revealed that at present, Zhongtong Cold Chain has launched the "whale pit, whale mine" action in the country, and its ultimate purpose is to further deepen the network density and breadth. It is expected that by the end of July 2022, except for Tibet, the national service network will be fully opened to achieve the largest service breadth in China; at the same time, the number of corresponding networks in the country will be expanded to 2,000 on the basis of the original, and the service radius will be reduced to less than 10 kilometers.
With the expansion of market demand, the growth of industry scale has become a foregone conclusion, the competition between enterprises will also escalate, and the market will gradually move towards standardization.
Under the guidance of national policies and the continuous improvement of industry standards, the future of the cold chain logistics industry deserves more expectations. In the end, the leader of the cold chain logistics industry will spend who will be spent, and it depends on how the market chooses.