Express delivery giants accelerate their competition for the end market Cainiao is caught in the vortex of "two alternatives" controversy

Reporters Li Chunlian and Li Qiaoyu

The mainland express delivery market has entered the era of 100 billion pieces, and every link of this huge market is triggering the competition of express delivery giants.

Recently, the "Reminder of Precautions for Returning to Work during the Spring Festival" issued by Cainiao Station clearly pointed out that it is a breach of contract for the station to use a third-party receiving system to enter the warehouse. Once it is found, Cainiao has the right to terminate the cooperation with the station, and the account associated with the same cooperative entity cannot be re-entered the cainiao station within one year. Cainiao's move is seen as a direct reference to the community group purchase of more vegetables under Pinduoduo.

Not long ago, Duoduo buying vegetables announced that it has achieved system docking with express delivery companies such as Tee Yida, Jitu, and Postal, opened up the signing link, and launched high subsidies to attract collection points to settle in.

Lawyer Li Min, a special researcher of the E-commerce Research Center of the Network Economic Society and a senior partner of Shanghai Hansheng Law Firm, told the Securities Daily reporter that the development of e-commerce so far, every moment will produce a large number of express delivery, the station as the end of the express, the importance of its traffic entrance can be imagined. The battle between rookies and Duoduo is essentially still competing for users, traffic, and monetization.

Rookie caught up in the "either-or" controversy?

A dark war between the delivery giants has begun again.

One of the focal points of the dispute between the two sides is whether Pinduoduo is using the "Duoduo Grocery Express Station Delivery Service System" to seize the end market of express delivery.

Some business people told the "Securities Daily" reporter that for a long time, the express delivery terminal market has been basically monopolized by the giants, and the delivery system provided by Duoduo can better return the logistics progress for users, increase the convenience of user pickup, and improve the work efficiency of the station, so as to provide better services for consumers who buy more vegetables, which does not necessarily mean that Pinduoduo intends to compete for the express terminal market. The person believes that the rookie station banning the third-party system is suspected of "choosing one of the two".

However, some insiders told the "Securities Daily" reporter that it is difficult to believe that Duoduo buys vegetables to deliberately develop a new delivery system and launch high subsidies but has no intention of competing for the express delivery market. Cainiao Station requires the use of the company's unified mailing and sending system for its sites, which is based on relevant national regulations and the management needs of the operator.

"The problem between buying more vegetables and rookie is essentially a business dispute." Ren Chao, a professor at the Law School of East China University of Political Science and Law, told the Securities Daily reporter.

In the view of Zhao Xiaomin, an express logistics expert and CEO of Guanshuo Capital, all disputes revolve around user stickiness. In the process of maintaining customer stickiness, the express terminal market will become an important place to maintain customer stability.

In the view of Dong Yizhi, a lawyer at Shanghai Zhengce Law Firm, the two sides compete for the express terminal market with the intention of competing for market share, including the ability to control the terminal. The station is actually a problem of layout, the more who controls the station, the greater its market share and voice in this industry, so the two sides are actually still competing for the dominant position in the market.

Wei Jianhui, an analyst in the brand retail industry of Analysys Analysis, told the Securities Daily reporter that the positioning of Duoduoduocai Station mainly meets the business needs of its community group buying, which is different from the positioning of Cainiao Station. However, in the medium and long term, it is not ruled out that buying more vegetables will further enhance the diversification of its terminal station business in the future.

Giants are racing for end-markets

With the continuous expansion of the express delivery market, especially the increase of e-commerce express mail, the competition for the terminal market has become more and more intense.

China Merchants Securities research report said that in the medium term, the resilience of e-commerce express demand is still strong, with the rapid growth of the per capita online shopping frequency in the sinking market, it is expected that the growth rate of the industry's express delivery orders will reach more than 20% in 2022.

Since last year, express delivery companies have entered the "service competition" stage from "price competition", and the terminal market has become a must for giants.

Wei Jianhui also said that the terminal market is the last link service close to consumers, and the level of service quality will greatly affect the customer's shopping experience on the e-commerce platform. Continuously strengthening the control of the terminal station is ultimately to improve the customer service experience, thereby increasing the repurchase rate of users on their e-commerce platforms.

At the same time, regulators are further regulating this market. Recently, Zhejiang Province has introduced the most stringent and clear terminal delivery plan.

Ding Zunian, member of the Standing Committee of the Zhejiang Provincial People's Congress and chairman of the Legislative Affairs Committee, said at the press conference of the Regulations on the Promotion of the Express Delivery Industry in Zhejiang Province that the Regulations on the Promotion of the Express Delivery Industry in Zhejiang Province were deliberated and adopted by the 31st session of the Standing Committee of the 13th People's Congress of Zhejiang Province and will be implemented from March 1, 2022.

This is the first provincial-level local regulation with the theme of promoting the development of the express delivery industry, which also means that it is the general trend for the express delivery industry to continuously improve the quality of service.

"The accelerated layout of the giants and the living space of the express terminal stores have been squeezed." Mo Daiqing, director of the online retail department and senior analyst of the e-commerce research center of the network economic society, told the "Securities Daily" reporter that the express station is the "last kilometer" and is also an important node for dealing with users. Under the trend of increasingly saturated traffic, the preemption of terminal resources has triggered giants to test the waters. The community group purchase has the advantage of natural traffic entrance, which is also an important reason for the "last kilometer" of Pinduoduo's layout of express delivery. On the contrary, for rookies, they will naturally not slacken off, and maintain their own advantages by seizing the "highland" of the terminal market, in order to have more initiative in China's logistics express market.