Produced by Radar Finance and | Zhang Kaijing, editor| deep sea
"Logistics companies are not independent and doomed to no good end!" The rest will either be annexed or closed! JD Logistics's revenue from jd.com's platform in the next five years must be less than half to be successful! ”
In 2017, Liu Qiangdong published a dynamic in today's headlines, saying that in the future, China's private logistics will only be a 2+1 structure, JD.com and SF have grown into two giants, and there is also a highly dependent platform to move bricks and play soy sauce.
In the past five years, JD.com has strategically subscribed to Dada, acquired Leapfrog Express, increased its holdings of China's logistics assets, and continuously expanded its logistics territory. Recently, there is news that Jingdong will spend 17 billion yuan to acquire Debon shares, in the eyes of the outside world, Debon, once known as the "king of LTL", will further make up for the shortcomings of Jingdong Logistics in express transportation.
In fact, JD.com's thinking is not uncommon in the entire express delivery industry, and mergers between express delivery industry leaders such as SF's acquisition of Kerry Logistics and Jitu's acquisition of Best in the past two years have occurred from time to time.
Industry insiders believe that from the current situation, the rise in industry concentration is a major trend, and there will be more mergers and acquisitions in the express delivery industry in the future.
The king of less than e-commerce?
Road transport has always been the most important component of the continental transport industry. The data shows that from 2015 to 2020, the proportion of road transport in the country's total freight volume has always remained above 70%, followed by sea, rail and air transport.
According to the weight of a single ticket, road transport can be divided into three major sections: express delivery, LTL and vehicle. Among them, express delivery is mainly for parcels with a weight of less than 10kg in 2C; the weight of the vehicle is usually greater than 3000kg; in contrast, LTL is more flexible, and can transport goods or multiple batches of goods with a weight of between 10kg and 3000kg, and the demand is mainly concentrated in B2B business such as industrial manufacturing and commercial circulation.
In 2020, the market size of vehicles, LTL and express delivery will be 3.8 trillion yuan, 1.56 trillion yuan and 0.88 trillion yuan respectively.
Deppon is a leader in the LTL field. According to the CITIC Securities Research Report, the company's history can be traced back to 1996, when founder Cui Weixing contracted the business of the air passenger and cargo office of the old cadre of China Southern Airlines. Since then, Debon has also innovated and launched special express businesses such as "air freight tickets" and "truck flights", and has embarked on the fast track of development step by step.
Despite the low gross profit margin of LTL and complete vehicles, Debon has become the first express shipping company listed on the main board of China with its focus on the large-scale market. In 2015, the company's LTL business revenue reached 11.2 billion yuan, ranking first in the industry, which is even higher than the sum of the revenue of the second to fifth LTL transport companies.
At that time, there was a popular saying in the logistics industry: express delivery has SF, and LTL finds Debon.
However, just to this extent does not mean that Deppon already has a solid moat. The mainland LTL market has a large number of participants, a highly dispersed market share, and a much lower concentration than that of European and American countries.
Even in 2015, Debon's share in the LTL market was only 1.44%, and the total size of the top ten markets in that year was less than 5% of the total.
In this case, Deppon's market position suffered a strong impact from the back wave.
On the one hand, in order to achieve better control, execution and timeliness, Debon has been implementing a direct operation model since 2008, but this has also brought greater costs to the company. In the face of the rapid expansion of franchised LTL express enterprises represented by China Railway Logistics, Aneng Logistics and One Meter Tick after 2010, Debon appears to be somewhat weak.
On the other hand, with the continuous development of e-commerce, the penetration rate of large-scale e-commerce has continued to increase, the boundaries between LTL and express delivery have begun to blur, and many express delivery companies, including SF and Tongda, have also begun to cut into the field of heavy goods express transportation.
Relatively speaking, the threat caused by express delivery companies cutting into the LTL field may be greater to Debon, after all, the concentration of the express delivery industry is much higher than that of the LTL industry, which makes many express delivery companies have a certain scale network advantage before developing to integrated transport enterprises.
Under this circumstance, Debon's LTL business has been under great competitive pressure.
In order to expand the business boundaries, in 2013, Debon also announced that it had entered the express delivery market. However, some insiders familiar with Debon frankly said: "It began to be too conservative, and the company believes that doing e-commerce parts is too low and not profitable." By the time 2016 is really ready to go, it's too late. ”
At the end of January, the company disclosed the performance pre-reduction announcement shows that in 2021, Debon expects the net profit attributable to the mother to decrease by 67%-87% year-on-year to less than 200 million yuan, and the iFind data of Flush shows that this figure is the company's level ten years ago; the deduction of non-net profit will achieve the first loss since the listing, a year-on-year decrease of 176.04% to 229.56%. This achievement is still the result of the company's large-scale layoffs and cost reductions in the second half of last year.
The company's market value has also shrunk by more than 60% compared with the peak period after listing.
JD.com has coveted Debon for a long time
However, for the former "king of the less than one carnage", other giants in the market still showed a lot of interest.
It was reported that after the listing of Debon shares in 2018, the rookie under Ali Group had extended an olive branch, and Cui Weixing offered 32 billion yuan at that time, but finally failed to negotiate.
After Ali's frustration, JD.com joined the battle. A logistics source from JD.com said that the two sides have been in contact around 2019. But the end result was that JD.com acquired Leapfrog Express.
The person in charge of a Debon business department outlet in East China also said that he had heard that Jingdong had "consulted" with Debon the year before, and last year there were many meetings, and the news from the above was "not enough money, no talks."
According to Debon insiders, the company began to optimize personnel from the beginning of 2021, from administration, clerical, to the abolition of multiple first-line sales departments to establish a single operating branch, store managers and senior management teams are involved, "in order to finally be able to sell a good price."
In fact, SF has also had contact with Debon. However, the former already has the dual brands of SF Express and Shunxin Jetta, and can increase the express delivery network of direct operation and franchise at the same time. In the 2020 annual report, SF once said that its SF Express LTL revenue ranked first in China's LTL fast running industry for two consecutive years in 2019 and 2020.
In January 2022, in the face of rumors that JD Logistics had acquired Debon Express in the market, Debon responded that the news was untrue. Today, Debon shares have not quickly denied the relevant news, but said in the announcement after the suspension that the parties to the transaction have further communicated and negotiated on matters related to the change in the equity structure of the controlling shareholder, and have not signed the relevant transaction agreement, and the suspension will continue.
According to the "Finance world", at the morning meeting on February 28, Cui Weixing had announced internally that the company would be acquired by JD.com, and a source said, "JD.com has appointed senior management to enter, and Cui Zong will completely leave the company around June." ”
In terms of the acquisition consideration, shareholders who participated in the general meeting of shareholders of Debon shares on March 4 revealed that JD.com had offered a price of 13 billion yuan, and then adjusted to 15 billion yuan, and the final transaction price is likely to be 17 billion yuan, compared with the current market value of the company rose by about 30%.
In the eyes of industry insiders, premium acquisition is not difficult to understand, after all, express delivery is a typical asset-heavy industry. Liu Qiangdong once said: "Logistics is not money can be done immediately, give you a hundred billion to let you build a logistics system covering five hundred cities across the country, you have to need at least five years of time, you have ten trillion also need so much time." ”
As of the first half of 2021, Debon has a total of 30,486 business outlets, which have basically achieved full coverage of prefecture-level and district-level cities across the country; the scale of employees is 63,700, with 143 distribution centers; and a total of 15,524 self-owned vehicles, accounting for 55.70% of its own transportation capacity.
The wild hope of JD Logistics
Liu Qiangdong's dedication to logistics has long been known. In 2007, it decided to build its own logistics system; in 2009, JD.com used most of the money raised to build its own warehouses; in 2010, the company began to recruit its own logistics employees; in 2014, JD.com launched the Pioneer Station Program - its 20,000 distributors can apply to return to their hometown to open a station.
By 2019, JD Logistics has been regarded by the outside world as the "troika" driving the revenue growth of JD Group, together with JD Mall and JD Digital.
It is worth mentioning that Jingdong Logistics is often used by the outside world to benchmark with SF and Tee, but there are still certain differences between it and the latter.
According to the prospectus, JD Logistics divides the services it provides into five categories: warehouse distribution services, express delivery services, bulk services, cold chain services and cross-border services. Among them, warehouse allocation services account for 50%-70% of each year's revenue.
Specifically, warehousing services refer to the fact that JD Logistics provides a series of services including warehousing and distribution for some large enterprise customers, such as Xiaomi.
A consensus in the industry is that the reason why JD Logistics can be delivered to consumers on the same day or the next day is because it will optimize according to its operation experience and algorithm, and distribute products to various regional logistics centers and front-end logistics centers in advance before users place orders, and "wait" for consumers to place orders closer to consumers.
From this point of view, warehousing is where JD.com's strength lies. As of the third quarter of 2021, JD Logistics has operated about 1,300 warehouses, 41 Asia No. 1 intelligent logistics parks, and a total warehousing area of about 23 million square meters.
However, JD.com is not invincible in the express delivery industry, and because more efforts are placed on building warehouses, JD.com's logistics trunk line is relatively weak.
According to the data, as of the end of 2020, JD Logistics's self-operated fleet has 7500 trucks and other vehicles, another 620 air cargo routes, and cooperates with the railway corporation to use 250 railway routes.
SF has 58,000 self-operated and outsourced trunk line transport vehicles, 105,000 terminal collection and dispatch vehicles, 451 flow directions of high-speed rail speed products, 61 self-operated aircraft and 14 outsourced aircraft, the number of scattered routes reached 2,027, and the total number of flights was 49,400. Compared with JD.com, the advantage is obvious.
In this context, who can take the lead in making up for their shortcomings can also take the lead in the fierce market competition.
To this end, JD.com first controlled Dada, then acquired Leapfrog Express, and increased its shareholding in China's logistics assets to 87.19%.
According to the data, Dada is a local instant retail and distribution platform, with a peak daily order volume of more than 10 million pieces; cross-speed transportation is known for air cargo, and JD Logistics has more than 620 air cargo routes in an instant after the acquisition. As of the first half of 2021, this number has grown to more than 1,000.
China Logistics Assets is a leading Supplier of Grade A logistics facilities in China. As of the half year of 2021, China Logistics Real Estate has 38 logistics parks and 179 logistics facilities across the country, with a total construction area of 3.1872 million square meters, and maintains cooperative relations with Jumei Premium, Ben Life, SF Express, Xiaomi, Bosch, Gree Electric Appliances and other enterprises.
Deppon is interpreted as a targeted complement. According to the Southwest Securities Research Report, Debon ranked second among China's LTL income enterprises in 2020, second only to SF, while JD Express ranked 16th in China's LTL industry in 2021.
However, frequent mergers and acquisitions have also tested JD.com's medium- and long-term management and integration capabilities. The financial report shows that after the consolidation of the express, the pressure on capital expenditure and cost control of JD Logistics has increased sharply.
Supply chain competition determines the future of the express delivery industry?
At the same time as JD.com's large-scale acquisition, other leaders in the express delivery industry are also carrying out sieges and land raids.
In September 2021, SF Holdings completed the acquisition of Kerry Logistics at approximately RMB14.6 billion, which has an extensive network of international freight forwarders. With the merger of Kerry Logistics, SF's performance has also ushered in an immediate improvement.
According to the express logistics business briefing released by SF, in January 2022, the revenue of the company's supply chain and international business reached 7.833 billion yuan, an increase of 522.66% year-on-year.
A month after SF joined hands with Kerry, the halfway killed Jitu bought the domestic express delivery business of Best Group, which was listed in the United States and had been continuously transfused by Ali, at a cost of 6.8 billion yuan.
People close to the deal said that the daily order volume after the merger of the two companies was about 46 million, with a market share of about 14%. According to a September 2021 report by Haitong Securities, a market share of 14% is enough to make Jitu the fourth largest e-commerce express delivery company in China, second only to Zhongtong, Yunda and Yuantong.
Industry insiders believe that as the scale benefits of the express delivery industry become more and more significant, the logistics and supply chain needs of B-end enterprises will become a major dividend for express delivery companies to conform to the development of the times, so the transformation of the supply chain of express delivery companies is an inevitable trend. "The competition of the 21st century is no longer a competition between enterprises and enterprises, but a competition between supply chains and supply chains."
Xu Guanju, a deputy to the National People's Congress and chairman of Chuanhua Group, wrote in the motion submitted at this year's two sessions of the National People's Congress: "It is crucial to build a new development pattern and improve the efficiency of the supply chain. Through the solution + socket connection, manufacturing enterprises should be provided with standardized and digital service functions such as capacity scheduling, digital operation of vehicle/LTL transportation, cloud warehouse operation, headquarters/platform settlement, supply chain finance, etc., and can provide enterprises with end-to-end full-chain supply chain logistics services. ”
However, although the major players in the industry are gradually increasing their layout in the integrated supply chain track, there are still many uncertainties in this track. One of them is the profitability of the 2B model.
For example, JD Logistics, which has been deeply involved in this for a long time, has made huge losses so far, and its gross profit margin and net profit margin are far from the profitable SF and Tee Yida.
When will JD Logistics be able to reverse the loss situation? Which company will fight from the decisive battle of the express delivery industry? Radar Finance will continue to pay attention.
Note: This article is the original of Radar Finance (ID: leidacj). Unauthorized reproduction is prohibited.