Image source @ Visual China
Wen 丨 Bohu Finance, author 丨 Tang Bohu
At the end of 2021, Hurun Research Institute, together with the Guangzhou Municipal Bureau of Commerce and the Municipal High-tech Zone, released the "2021 Unicorn List", which listed 301 non-listed companies worth more than US$1 billion in China.
In the logistics industry, there are cainiao network, J&T Express (Jitu Express), Didi Freight, Lalala, Fengchao Technology and other companies shortlisted.
Among them, Jitu Express ranked 16th among more than 300 unicorns, with a valuation of about 130 billion, which is the second logistics company with a valuation of 100 billion yuan in addition to Cainiao Network.
(Source: Network)
Now, the company, which is valued at 100 billion yuan, has not chosen to continue to roll in China, but has announced its entry into Latin America.
1. Enclosure valuation method
If only through southeast Asia and the Chinese market, jitu to get financing, valuation of hundreds of billions of yuan is difficult. The reason why it stands on the same level as the rookie network is that it has set its sights overseas.
On February 24, Jitu announced that it had officially entered the Latin American market and operated in Mexico.
Jitu said it has established 12 transshipment centers and 26 distribution points in Mexico, and the distribution network basically covers the core area of all 32 mexican states.
As an important part of the express delivery service, the Mexican version of the Jitu Express APP will also be launched.
In addition to Mexico, on January 7 this year, Jitu announced the launch of express delivery network operations in the United Arab Emirates and Saudi Arabia, and established a nationwide self-delivery network and localized warehousing system in the local area.
It is reported that in order to enter the Middle East market, from April 2021, Jitu spent 8 months to investigate, select and trial operation in the Middle East.
According to the timeline calculation, starting from March 2020, Jitu began to jump out of the Southeast Asian market and enter China, officially starting the road of foreign expansion. Last year, in the case of the domestic price war being stopped, Jitu continued to look overseas, entering the Middle East in January and Latin America in February.
According to the official website of Jitu, the express delivery network of Jitu Express has covered 10 countries in China, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Singapore, the United Arab Emirates and Saudi Arabia, serving more than 2 billion people worldwide.
Now, with the addition of Mexico, there are 11 countries, including four regions in Southeast Asia, China, the Middle East and Latin America.
Expanding overseas and expanding the express delivery territory has become the strategy of the current Jitu, which means that Jitu needs more funds. And the pole rabbit touched the pulse of capital.
In 2021, within one year, Jitu completed three financings, amounting to $1.8 billion, $250 million and $2.5 billion, respectively. Behind this is the many blessings of well-known investment institutions such as Boyu, Hillhouse, sequoia and so on.
After these three rounds of financing last year, the valuation of Jitu reached $20 billion, about 126 billion yuan. Become the second logistics company outside the rookie network with a valuation of more than 100 billion.
In addition, foreign media said that in August last year, Jitu was still in financing negotiations with some investors such as Tencent, and the estimated amount was between $1 billion and $2 billion. If the financing is completed, Jitu will become one of the highest-valued startups in Asia.
Jitu, just by virtue of continuous "enclosure", has completed its own valuation of 100 billion.
2. Go to the big trees in Latin America
Mexico has a strong sense of contrast, on the one hand, the country gives the impression of being poor and chaotic. A large number of mexican people cross the border into the United States every year, and after Trump took office, he deliberately built a border wall for this purpose.
But at the same time, Mexico is the second largest economy in Latin America, and in the first half of 2021, Mexico has become the largest trading partner of the United States.
In terms of per capita GDP, Mexico's data is not bad, more than 8,000 US dollars in 2020, and even more than 10,000 US dollars when it was the highest in previous years. Until 2018, Mexico's GDP per capita had been ahead of China's.
With an economic foundation, then the development of the Internet is also a natural thing.
According to relevant data, Mexico has a population of about 128 million, 65% of Internet users, 87% of mobile devices, and 62% of mobile Internet users.
The arrival of the epidemic in 2020 has enabled this Internet dividend to be transformed into e-commerce.
According to AMVO, the Mexican Online Sales Association, Mexican e-commerce sales reached 316 billion pesos (about 100.5 billion yuan) in 2020, with a growth rate of 81%; in 2021, this sales increased by 27% to 401 billion pesos (about 123.4 billion yuan).
Such the scale and growth rate of e-commerce sales have naturally attracted many cross-border e-commerce companies from Mexico, including Shopee, which entered the Mexican market in March last year.
Founded in Singapore in 2015, Shopee is currently the fastest growing e-commerce platform in Southeast Asia, and entered China in 2016 to carry out cross-border business.
A year before entering Mexico, Shopee also entered the Brazilian market. In two years, Shopee became the most downloaded shopping app in Brazil. According to a survey by Shopee, the number of local sellers registered on the platform increased by 600% in 2021.
The reason why I talk about Shopee is because Jitu has a long-term cooperation with Shopee in the Southeast Asian market. According to previous media reports, Jitu's entry into Latin America this time also followed Shopee's footsteps.
We know that new logistics companies that can emerge in the past few years are dependent on the rise of the e-commerce economy. E-commerce platforms need logistics companies to send express delivery, and the performance of logistics companies also depends on the orders of the platform.
If Shopee can win a place in the Latin American e-commerce market, Jitu will naturally get a piece of it.
3, troublesome things: only "circle" not "species"
An indisputable fact is that in addition to the more mature market in Southeast Asia, in China, Jitu only has orders, and in the Middle East and Latin America, the current order volume can not be talked about.
From a domestic point of view, in October last year, Jitu acquired best domestic business for 6.8 billion yuan. Seeing that a hand has reached Taobao and is about to embark on the peak of order volume, the problem of integration is in front of us.
According to the Securities Daily, after the acquisition of Baishi, Jitu began to integrate. But at the beginning of this year, Jitu was exposed to the suspension of operations due to the failure to switch outlets, and many express parcels were stranded at local transfer stations.
However, the most difficult problem is the integration of franchisees in various regions.
In the integration plan of Jitu, there are regional segmentation solutions and joint venture solutions. However, even if the plan is complete, it is inevitable that there will be problems in the distribution of benefits in actual operation, which will affect the smooth transition of the business.
There is also a question that after winning the hundred worlds, the order of The Pole Rabbit will undoubtedly go to a higher level, but can the order of the Pole Rabbit be profitable? Or is it that like Shentong, there is a problem of "increasing revenue without increasing profits"? It's all about life and death.
The market outside of China, for Jitu, is completely crossing the river by feeling the stones, and facing more challenges. In Latin America, Jitu may also be able to establish itself through Shopee, but in the Middle East, it is entirely up to Jitu to pull orders.
However, Jitu did not start "farming" because of fear of difficulties, but chose to continue to expand the territory.
According to media reports, Egypt in the Middle East and Brazil in Latin America have become the next target of jitu. Last year, Jitu has set up logistics companies in these two places and formed a localization team.
It is difficult to judge whether if it were not for a paperwork in March last year, the price war was stopped, and Jitu would not have been so anxious to enter overseas. But there is no doubt that the current pole rabbit is still full of vitality and is still favored by capital.
As long as Jitu makes an announcement saying which country it has entered today, it will arouse the enthusiasm of capital. At present, what Jitu needs to prove is not profitability, but the ability to enclose the land, because the default of capital is that there is a single place in the land, and the order is the lifeblood of express delivery.
This may be the wonder of the rising stars: Shen Tong, Yuantong, and Yunda would have been wiped out long ago if they had done so.
However, after Jitu has occupied all the turf, it finally has to face this pile of troubles left over from the past, and then returns to the core of the express delivery: how to deliver? How to make users satisfied?
Valuation can rely on land enclosure, but value preservation and appreciation rely on deep ploughing.
References:
1. Interface News: Jitu Express enters the Latin American market
2.36 Kr out to sea: Jitu officially launched the UAE and Saudi Arabia express operation network, and will continue to explore the Middle East and North Africa market in the future