Image source @ Visual China
Wen 丨 City Boundary, Author 丨 Feng Chenchen, Editor 丨 Liao Ying
15 years ago, when Zhou Shaoning left Google to start Baishi, he probably never thought that one day, he would be so close to the cliff.
In Zhou Shaoning's eyes, he was once a "changer" in This "earthy" Chinese express delivery industry. "There are trillions of yuan in output value here a year, but China's logistics are too backward and there is a price war in disorder." The change of an industry must come from external forces, and the people who do logistics have done it for ten years, and there has been no change at all", this is his domineering declaration of war as a returnee "student bully".
But 15 years later, after "burning" at least 8.9 billion yuan, his Best Group has obtained the lowest market share and the lowest public satisfaction. With the "more and more involution" of the express delivery industry in recent years, the price war has intensified, and Baishi has become synonymous with "low-price dumping" with Jitu by virtue of the single ticket price lower than the general cost price in the industry.
This is a very dramatic scene, in the past shouted "China's express delivery backwardness" and despised the "disorderly price war" Zhou Shaoning, but became the most ruthless price pressure. In October 2021, Zhou Shaoning announced that he would sell china's express delivery business to Jitu for 6.8 billion yuan, a decision that was enough to change the fate of Baishi and further plunge his stock price until he received a "delisting letter".
Is it really a bad thing to get rid of this big burden of "burning money"? After announcing the cooperation with Zhongce Group, the stock price of Best Group, which is located in the US stock market, has gradually picked up. As of February 15, Beijing time, Best's stock price reached $1.03, returning to the $1 mark, temporarily getting rid of the possible delisting dilemma.
01, 8 years less than a loss of nearly 8.9 billion
"It is sooner or later to sell", as early as half a year ago, when the company would be sold, a person in charge of a Best business outlet sighed.
On January 18, Best Group received a letter from the New York Stock Exchange that the average closing price of the company's American Depositary Receipts (ADS) was less than $1 for 30 consecutive trading days, which did not meet the applicable price standards in the new York Stock Exchange's criteria for continued listing. However, the company still has 6 months to reconvene the minimum share price requirements.
Four months ago, Best Group also announced that it would sell its domestic express delivery business to Jitu Express, a "new express delivery force" that had recently entered China, for about 6.8 billion yuan. According to Zhou Shaoning, the acquisition only covers its China express delivery business, including the equity, assets, outlets, personnel and other aspects of express delivery-related companies, excluding other businesses of the group, and will further focus on express transportation, supply chain and international core logistics business in the future.
It is this news that makes the already poor Best stock price worse. Immediately after the news was announced, Best Group's stock price plummeted by 23.7%, with a total market value of only $620 million. Since then, Best Group's share price has fallen further until it falls below the $1 warning line and received an inquiry letter from the New York Stock Exchange.
In the first three quarters of 2021, best express service revenue fell by 21.7% year-on-year, leaving only 3.988 billion yuan, the highest decline among several major sectors. Even so, the revenue of express delivery services still accounts for 58.5% of the total revenue of Best, which can be said to be the backbone of revenue. As for the main reason for the sharp decline in revenue, Best attributed it to the highly competitive market dynamics.
According to oriental wealth choice data, from 2014 to 2020, the net losses of Best Group were 718 million, 1.059 billion, 1.363 billion, 1.228 billion, 508 million, 219 million and 2.051 billion yuan, respectively, with a total of 7.15 billion yuan in 7 years. In the first three quarters of 2021, Best once again handed over an answer sheet with a loss of 1.736 billion yuan. In less than 8 years, Best Group lost nearly 8.9 billion yuan.
The money burned out, but the effect was not ideal.
According to a report given by Huachuang Jiaoyun, Best's three data (market share, single ticket revenue and business volume growth rate) are all at the bottom of several express delivery companies. Among them, in the second quarter of 2021, in the case of the "inner volume" of the express delivery industry, the growth rate of Baishi's single ticket revenue was as low as -17.7%, and the growth rate of business volume was only 1.2%. In addition, in the entire first half of the year, The market share of Best was only 8.2%, which was also at the bottom.
Not only that, but 8.9 billion also burned out a series of bad reviews.
In August 2019, a female netizen in Jilin said that she was harassed by the Best courier when buying lace safety pants, and Best subsequently fired the courier involved. Three months later, a Best Logistics truck caught fire and burned a package weighing 13 tons. In addition, the State Post Bureau's 2020 express delivery service satisfaction survey shows that in the public satisfaction ranking column, Best is ranked third from the bottom of the ten express delivery companies, only higher than Shentong and Tiantian.
Although the problems are constant, the assets of the transshipment center, technology, system and other aspects owned by Baishi are exactly what the new "spoiler" Jitu needs. China Post Securities also believes that the acquisition of Best by Jitu may accelerate the integration of China's express logistics market, and SF and the "Tongda Department" must go all out to fight. This means that Jitu ranks among the top three private express delivery companies in China, coupled with its "title" of the second largest express delivery in Southeast Asia, and will become one of the most competitive enterprises in China's international express delivery market.
No wonder some people say, "Zhou Shaoning found a good home for Best Express."
I don't know whether it is a coincidence or "revenge", Zhou Shaoning, who left the Chinese express delivery market, chose to leave a suspense for the industry.
02, "earthy" express circle of "alien"
In the eyes of many people, this circle of Private Express delivery in China itself carries a "earthy taste".
In fact, whether it is Shentong, Zhongtong, Yuantong, Yunda, and Huitong, which was acquired by Baishi, these "Tongda" companies that "have brought their roots" to the "Tongda" company, or SF, which was once known as the "Mouse Club", the founder is basically from the grassroots, but in the context of the times, with luck and opportunity, he successfully tore his mouth until he became a share of the express delivery industry.
In a way, Zhou Shaoning is an "outlier", he is a Chinese elite with a glamorous resume, before the founding of Baishi, his name was mostly placed with Lee Kai-fu and other celebrities. Yu Weijiao, the helmsman of Yuantong, even shouted zhou Shaoning in public, "Don't always think about staying away from us."
6.8 billion sold more than ten years of hard work, for Zhou Shaoning, who is the first in everything, you can't say that he is willing to leave.
Zhou Shaoning likes to wear a pair of black-rimmed glasses, with that slightly standard Chinese character face, when not smiling, he looks a little dignified, on his body, there are too many labels related to genius, which also makes him one of the Chinese who have attracted much attention in that era, and was once the pride and idol of many Ningbo people.
(Zhou Shaoning)
In the summer of 1978, the 16-year-old talented teenager in Ningbo was admitted to the computer department of Fudan University, and just two years later, he went to the United States to study. Behind this, it was an unforgettable experience, "I didn't have Wu Ying's strong body, he went to the United States to work as a porter on the dock, I could only wash dishes in the hotel and take tips," Zhou Shaoning recalled.
The lack of life could not stop Zhou Shaoning's talent from highlighting, and he not only won a master's degree in engineering from Princeton University, but also entered Bell Labs and Lucent (formerly known as AT&T).
Speaking of Bell Labs, many people may feel strange, but you only need to know that this is the birthplace of solar cells, transistors, C language, communication satellites, cellular mobile communication equipment, and communication networks, and winning 8 Nobel Prizes is enough to explain its status. Zhou Shaoning worked for Bell Labs for more than ten years and served as the head of the senior digital communication research team, and was one of the "highest climbing" Chinese at that time.
Zhou Shaoning, who is talented and intelligent, is still a workaholic and is known for his diligence. Once, Zhou Shaoning, who had been busy for one night, had just come out of the laboratory, and someone said good morning to him, and when he came back to god, he realized that it was the next morning, so he went back to work. Here, Zhou Shaoning met Wu Ying, who was called "bearded" by the Chinese, and the two felt sorry for each other, "as early as when I was at Bell Labs, I wanted to work with him", and Wu Ying said of this "madman".
This experience in the United States not only enabled Zhou Shaoning to learn knowledge, but also broadened his horizons. Compared with the United States, the newly emerging Chinese market is the future after all, for this point, Zhou Shaoning and Wu Ying's views are quite consistent. "China's telephone penetration rate is only 1.7%, while the United States is 76%, as long as China develops to 50%, it is a market of 600 million people, 4 times that of the United States", this is Wu Ying's account at that time.
03, PHS "myth" and Google fold
In 1992, Wu Ying took the lead in returning to China, established Starcom Network Systems in Beijing, and merged with Unitex Telecom founded by Lu Hongliang and Xue Manzi in 1995, and UT Starcom was born, with Wu Ying as president and CEO. Then the next year, Zhou Shaoning, who had not returned to China for more than ten years, received an invitation from Wu Ying, "It's too hard, let's come together."
In this way, Zhou Shaoning joined UTStarcom and was responsible for the operation of the China segment.
"Although there are not many words, but it is very passionate", this is the employee's evaluation of Zhou Shaoning. Zhou Shaoning continues to play the role of "fierce general" here, and together with Wu Ying and others, he creates a "PHS miracle" with an audience of hundreds of millions of people. "The locomotive will only rush forward, not only the best, but also the first", this is Wu Ying's affirmation of him.
(Wu Ying)
Speaking of the principle of PHS, it is to use the wireless technology of telecommunications network and connect the front end to PHS (low-power mobile phone system) to become a mobile phone built on a fixed network. Around 1996, Xu Fuxin, known as the "father of PHS", sought cooperation with a number of companies such as Huawei and Ericsson, but did not succeed, and finally let Wu Ying pick up the leak.
Coincidentally, at the end of the 1990s, when the two giants of mobile and telecom were separated, China Telecom suffered a heavy impact on its performance after divesting the mobile business, leaving the fixed telephone business, due to the saturation of the household installation rate, coupled with social development, the utilization rate plummeted, and it was in urgent need of a new breakthrough. At that time, the rather "overbearing" two-way charging model just gave PHS the opportunity to develop, and also made the equipment manufacturer UTStarcom soar in performance.
Zhou Shaoning, the chief operating officer, revealed in an interview that UTStarcom accounts for 60% of China's PHS equipment market, and its profit increased from $1999 to 2004 alone from $190 million to $2.7 billion. At that time, Fudan University, Zhou Shaoning's alma mater, also forwarded an article on the official website titled "Alumni Zhou Shaoning Leads UTStarcom, Ranking First in the List of the World's Top 100 High-Growth Enterprises".
The popularity of PHS is a phenomenon, but the group of "middle-aged men" who can create this achievement is synonymous with true temperament. A few of them could argue in front of the employees, but then they would squeeze into a car, open the window and sing all the way, and even be happy enough to lift Zhou Shaoning up and throw him down, so that he left a scar on his face.
With the alliance of "friendly businessmen" such as China Mobile and Unicom, encircling and suppressing PHS through disguised price reductions and other reasons, coupled with internal struggles and other reasons, Zhou Shaoning chose to leave in 2005 on the grounds of the first loss in performance. Subsequently, Wu Ying and others also started another stove, and under the internal and external troubles, PHS became a victim of the welfare of the public.
In fact, zhou Shaoning after leaving UTStarcom, has long had the intention of starting a business, "working" for 20 years, he does not want to see other people's faces, at this time Google to give him an attempt, aroused his interest. "Without any metrics, my job is to get more people to use Google," said Zhou Shaoning, who co-runs China's Great Seal with Kai-Fu Lee, referring to Google's appeal.
(Kai-Fu Lee)
"Neither you nor I joined for the benefit of joining forces to open up the Chinese market", this is The first sentence of Zhou Shaoning when he saw Kai-Fu Lee. At that time, the industry generally believed that after the two generals "combined swords", Baidu would face great pressure. Unexpectedly, Baidu helmsman Robin Li directly released a harsh word, "Look at today's Yahoo, you can basically imagine what Google will look like 5 years later."
As it turned out, Robin Li won. At the end of 2006, Zhou Shaoning, who had only been with Google for one year, chose to leave, and the reason he gave this time was to "continue to pursue new career development based on personal interests." In fact, in October of that year, there were rumors that Zhou Shaoning would resign due to Google's poor performance in China, but Google denied it.
"Zhou Shaoning's departure has dealt a big blow to Google's localization efforts," some analysts said. After him, executives, including Kai-Fu Lee and others, have also left Google, and the contradiction between Google China's management team and the senior management of the headquarters is expanding and affecting the company's performance. Since then, the supremacy of Baidu's search field has become unshakable.
04. Did Zhou Shaoning really lose?
This time, no one could stop Zhou Shaoning's desire to start a business.
In 2007, Zhou Shaoning took out 10 million savings to establish Best Logistics in Hangzhou and started a new journey. "The greatest wealth in life is networking, which can open every door for you to the ability you need," is the golden phrase of Success Guru Anthony Robin. Zhou Shaoning, who has no customers and team, relies on connections, resources and influence.
If you knew Zhou Shaoning at that time, you can see the 45-year-old, carrying a large bag around to talk to customers about cooperation, relying on personal connections to gradually grope, sometimes even being able to talk about the same thing several times a day, still full of passion. "I just started a business, I was very excited every time I saw a customer, and now let me talk about it five times a day, maybe I can't talk about it anymore," Zhou Shaoning recalled.
As for why the logistics field was chosen, in his words, "there is an output value of several trillion yuan a year, while China's logistics is too backward, it is all low-end competition, disorderly price wars, and someone needs to integrate resources." The change of an industry must come from external forces, and the people who do logistics have done it for ten years, and there is no change at all. ”
This is a returnee from Google, declaring war on the domineering spirit of China's logistics industry, which is full of "local atmosphere".
In Zhou Shaoning's eyes, Baishi is different from China's traditional logistics companies, and his "teacher" is Apple, one of the world's most profitable companies. Zhou Shaoning concluded that Apple can use its huge peripheral resources for its own use, one is to take the core of the platform into its own hands, and the other is to provide one-stop comprehensive services.
Therefore, Zhou Shaoning also gradually grafted the experience learned from Apple to Baishizhong, and positioned it as "the most valuable logistics community platform in China's logistics industry", put forward the concept of "cloud logistics", and realized the networking, informatization and standardization of logistics and transportation through the independently developed geniMax system, and integrated the online and offline supply chain links.
After starting a business, Zhou Shaoning not only maintained a high-intensity work, but also began to have a tight life, after all, he spent his own money. Business reported that Zhou Shaoning's annual salary is $1 and he agreed with management to only stay in hotel chains on business trips. As long as he did not travel, he stayed in the office until midnight, and often held meetings until the early hours of the morning, which also made the company win the title of "Best Nightclub".
On the first anniversary of the founding of Baishi, Zhou Shaoning changed the direction of his destiny because of a dinner.
In June 2008, Zhou Shaoning and Gou Had dinner. After three rounds of drinking, Zhou Shaoning said his dream to be China's UPS (United Parcel Delivery Service Company of the United States, ranked 35th in the Fortune 500 in the United States with revenue of $84.6 billion in 2021). "This is good, support you", Gou and others hit it off and decided to invest $15 million.
This investment smoothly allowed Zhou Shaoning to survive the most difficult time.
What Zhou Shaoning wants to do is far from integrating logistics resources, he is bent on subverting the express delivery pattern created by This group of "grassroots" in China. In 2010, Zhou Shaoning took an important step by acquiring 70% of the equity of Huitong Express and changing its name to Bestway. Because of this, Best's sales in 2011 soared from 300 million to more than 1 billion yuan, and reached cooperation with 200 companies such as Li Ning and Seven Wolves.
For a long time, Ali's identity has been the largest shareholder of Best Group, with a shareholding ratio of more than twice that of Zhou Shaoning, and the Alibaba listing propaganda film of more than 7 minutes is enough to give Best half a minute to appear on camera, even more than other express delivery companies such as Shentong.
(Screenshot of Alibaba listing promotional video)
Continued expansion requires huge financial support.
In June 2017, Best Group filed a prospectus with the U.S. Securities and Exchange Commission (SEC) to raise no more than US$750 million. However, due to the continuous losses, investors' reactions were tepid, and Best Group finally decided to lower the issue price range, resulting in a 1/3 reduction in the scale of IPO issuance and a reduction in the total amount of financing to half of the original.
In this regard, Zhou Shaoning also forcibly explained a wave, "Listing is just a starting point, listing today, tomorrow the stock will fall, it is not a good thing for investors." In the case of relatively abundant funds, there is no need to raise so much money at once, and the starting point of the issue price is not important." What Zhou Shaoning did not expect was that this had become the most brilliant moment for Baishi's stock price.
Since its listing in 2019, Best's stock price has fallen all the way, from $6.86 to $0.621 at the end of January this year, once again setting a record low, falling nearly 91% in less than three years, and the market value has evaporated by $2.4 billion, about 15.1 billion yuan. However, on January 24 this year, Best Group and Zhongce Group reached a cooperation, the two will complement each other's resources, and Zhou Shaoning also appeared to help. Since then, Best's share price has shown signs of recovery until it rises to $1.03.
In fact, for Best, it is not a bad thing to choose to sell the Chinese express delivery business and go light, which means that it will be able to focus more energy and resources, which is also an opportunity for Zhou Shaoning to seek a turnaround. "We are optimistic about the supply chain and freight, will achieve profitability in 2022, after exiting the Operation of the Chinese express market, cash will be better used for the remaining business, especially freight, global supply chain", obviously, Zhou Shaoning also thinks so.
After losing the Chinese express delivery market, this who pursued the first Google "xueba" still did not give up.