Although China's express delivery industry continues to maintain a good growth momentum, from the perspective of industry competition, it has basically been fixed as a situation in which several giants occupy an absolute share. The unaudited financial results of the fourth quarter of 2021 and the whole year of 2021 released by ZTO Express on March 17 show that ZTO Express's parcel volume in 2021 was 22.3 billion pieces, an increase of 31.1% year-on-year, and its market share expanded to 20.6%.
"In 2021, ZTO focused on itself, and in the face of various uncertain situations, it still maintained a certain medium-high speed growth, becoming the world's first express delivery company to exceed 20 billion pieces of annual business volume, and steadily increasing its market share to 20.6%." Lai Meisong, chairman and CEO of ZTO Express Group, said.
Zhongtong leads the way
According to the financial report data, the annual revenue of ZTO Express in 2021 increased by 20.6% year-on-year to 30.4 billion yuan, and the adjusted net profit increased by 7.8% year-on-year to 4.95 billion yuan.
Zhongtong Express said that the company has maintained the first place in the "Tongda system" for a long time on the Cainiao index and maintained a high level of customer satisfaction. At the same time, the latest data from the 2021 express delivery service satisfaction survey and time limit punctuality rate test results notified by the State Post Bureau show that for the first time in the history of ZTO Express, it has entered the top three in the industry and ranked among the first echelon.
In 2021, the total amount of domestic express delivery business exceeded 100 billion pieces for the first time, and it took only three years to double from the first breakthrough of 50 billion pieces in 2018, and ZTO Express has achieved an average daily business volume of more than 60 million pieces.
However, under the pressure of the industry price war that has continued for many years, even these express delivery companies that occupy an absolutely dominant market share are also trapped in the dilemma of "incremental no increase", and have not really realized the mining of commercial value in the growth trend of the market, so the industry has also begun to reflect on this phenomenon, of which Zhongtong Express has clearly stated from last year that "unnecessary low-price loss pieces or profits in exchange for short-term market share growth are neither wise nor sustainable", and said that it will pay more attention to the amount of profitable pieces.
Yan Huiping, Chief Financial Officer of ZTO Express Group, said: "The impact of competition due to price declines is weakening, and since the second half of 2021, the company has systematically implemented a number of initiatives to improve the accuracy and timeliness of data, thereby improving the visualization of operational results and making decisions and responses faster, and we have begun to see benefits." The company's cost structure remained stable and efficient, with management expenses falling 0.2 percentage points to revenue to 5.4%. Capital expenditure for the full year totaled $9.3 billion, and operating cash flow increased by 45.8% year-on-year to $7.2 billion. We reasonably expect operating cash flow to exceed capital expenditure in 2022. ”
In the fourth quarter of 2021, ZTO's parcel volume was 6,343 million pieces, an increase of 17.2% from 5.41 billion pieces in the same period in 2020, revenue was 9,217 million yuan, an increase of 11.6% from 8,257 million yuan in the same period of 2020, and adjusted net profit was 1,745 million yuan, an increase of 35.2% from 1.29 billion yuan in the same period in 2020.
Zhongtong Express said that in 2021, thanks to the increase in the utilization rate of high-capacity vehicles, the improvement of automation rate and the improvement of operational efficiency brought about by the optimization of routing planning, in the context of the continuous rise in oil prices, the single-ticket trunk line transportation cost of Zhongtong Express increased by only 0.8% to 0.52 yuan year-on-year, and the single-ticket sorting cost fell by 1.1% to 0.3 yuan compared with last year, and the scale effect was further highlighted.
The industry landscape has been determined
In Lai Meisong's view, "the express delivery industry will continue to concentrate on integration and optimization, the stronger the competitive landscape will tend to be stable, the balance of price and quality efficiency will continue to be optimized, and the advantages of scale effect will inevitably become increasingly prominent." Zhongtong has obvious advantages and is in a favorable position of competition, we will accelerate the transformation from 'high quantity' to 'high quality', continue to focus on the group's resource allocation and maximize efficiency, pay more attention to capacity building, network stability and grass-roots rights and interests protection, fully apply digital and intelligent integrated management tools, steadily promote the development of various ecological sectors, and strive to create a moat of integrated logistics service capabilities in the next 5 years, from leading advantages to 'absolute advantages' and 'ecological advantages'. ”
According to the information released by Zhongtong Express, while developing the main business of express delivery in 2021, the comprehensive ability to meet diversified delivery needs is continuously enhanced by continuously improving the ecological service capabilities such as heavy goods, warehouse integration, cross-border logistics, intelligent research and production, financial services, aging cold chain, terminal construction and commercial superposition.
This is also the current express delivery enterprises several core "players" invariably the same competitive thinking, relying solely on the main business of express delivery itself, although it is still an incremental market, but the level of income in the competitive environment is obviously not enough to maintain the appetite of these giants, while the market demand is gradually diversifying, the requirements for express delivery companies in the comprehensive supply chain service capabilities continue to improve, and can provide far more than the profit margin of the express delivery business.
ZTO Express said that while steadily developing the main business of express delivery, the strength of the main business of continuous express delivery can provide a solid foundation for ecological construction, and doing a good job in ecology can also further enhance the strength of express delivery through the maximization of resource utilization, and enhance the moat of ZTO in integrated logistics.
In 2021, a major breakthrough in the product structure of ZTO Express is to launch the standard fast and "fast brother" products to further layer the aging products. According to the relevant data released by the financial report, Zhongtong Biaokuai has now launched nearly 300 starting cities and 362 destination cities, covering most of the major prefecture-level cities in the country, and the mainstream order entrance and platform of Biaotong Express products have been docked.
The "fast brother" is based on the organizational model of "direct operation + terminal service crowdsourcing", based on the aviation high-speed rail trunk line + city bus shuttle system, using digital layout and intelligent algorithms, to provide 6/12 hours in the same city and 12/24/48 hours of time products across the city.
In another business area with great potential, the express business, Zhongtong Express announced on December 29 last year that it had completed more than $300 million in Series B financing. As of the fourth quarter of 2021, Zhongtong Express has more than 16,000 service outlets, more than 4,100 direct network partners, 97% coverage in districts and counties, daily shipments exceeding 35,000 tons, daily shipments exceeding 1.3 million pieces, and daily transportation capacity of 45,000 tons, which was selected into the "2021 Large-scale Express TOP10" list.
In addition, ZTO Express has also achieved 8 core hubs in the country in the cold chain business, covering more than 180 cities, and the shipment volume in the third and fourth quarters of 2021 has grown rapidly. In terms of international business, it has laid out local express delivery business in 6 countries in Southeast Asia (Vietnam, Cambodia, Laos, Myanmar, Singapore, Thailand) and 5 African countries (Nigeria, Kenya, Ghana, Uganda, Morocco), while expanding the layout of new countries and exploring potential markets such as South Asia and the Middle East.
At the same time, ZTO Express has also entered the business and life service business field by establishing the "Rabbit Xi" brand, extending to diversified community services. According to Zhongtong Express, Tuxi is committed to building a terminal network with standardized image and service capabilities through the transformation of contracting areas and the expansion of service providers.
As of December 31, 2021, ZTO has more than 30,400 outlets, 99 sorting centers, more than 5,700 direct network partners, about 3,700 trunk transportation routes, and about 10,900 trunk vehicles, of which more than 9,000 are high-capacity models with vehicle lengths of 15 to 17 meters.
Responsible Editor: Huang Xingli Editor-in-Chief: Han Feng
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