M&A integration accelerates, real-time distribution heats up Logistics technology review and forecast: low-carbon digital intelligence

In 2022, the logistics technology track can be described as a parallel race, with frequent actions such as financing, acquisition, entering the village, and going abroad. E-commerce logistics, instant delivery, cross-border logistics and other subdivisions are also particularly lively.

In February, the "Opinions of the CPC Central Committee and the State Council on Comprehensively Promoting the Key Work of Rural Revitalization in 2022" was released, putting forward the goal of basically realizing the goal of "express delivery through villages and villages" in established villages in 2022. The coverage of "express delivery to the village" continues to increase.

Industry M&A consolidation also continues. On October 29, 2021, J&T Express and Best Group jointly announced that they reached a strategic cooperation intention, and J&T acquired Best's domestic express delivery business for 6.8 billion. By May 2022, the network integration of J&T and Best was basically completed.

In September of the same year, JD Logistics completed the equity acquisition, and finally held a total of 71.93% of the equity of Deppon shares. The founder of Deppon withdrew from management and remained relatively independent.

The increasing presence of instant retail has attracted the high attention of Internet giants, and JD.com, Dada, Ali, Pinduoduo, and Meituan have stepped into the game.

According to the monitoring data of "Dianshubao", an e-commerce big database under NetEconomics, a total of 17 financing events occurred in China logistics technology in 2022, with a financing amount of 1.01 billion yuan. In 2021, China Logistics Technology had a total of 74 financings, with a total financing amount of 64.32 billion yuan. In 2022, the number and amount of financing decreased significantly.

What kind of 2023 will the logistics technology field usher in?

Logistics technologies such as intra-city freight and just-in-time delivery have presented six characteristics

Whether it is e-commerce logistics, third-party logistics, instant logistics, etc., the digitalization and new technologies of the logistics industry are becoming an important force to change the overall market situation of the logistics industry, and it is also an important transformation direction of the current logistics market.

Feature 1: "Express delivery into the village" and then upgrade the "sinking market" business battle

On February 22, the "Opinions of the CPC Central Committee and the State Council on Comprehensively Promoting the Key Work of Rural Revitalization in 2022" was released. The document mentioned that in 2022, the mainland will basically realize the "village-to-village express" of the formed village. According to the data of the State Post Bureau, the current express delivery service coverage rate in the country's established villages has reached 90%, and more than 100 million express parcels enter and exit rural areas every day.

Mo Daiqing, senior analyst of the online retail department of the e-commerce center of NetEconomics, said that the sinking market is still the main battlefield for e-commerce such as Pinduoduo, JD.com, Ali, Douyin, and Kuaishou. As the market in first- and second-tier cities tends to be saturated, major e-commerce platforms urgently need to find incremental markets. The consumption scene of the sinking market has become an important consumption growth point. Whether it is rural online shopping or agricultural products upstream, it depends on the coverage of express delivery, and at the same time plays a vital role in e-commerce to open up the "last mile" service.

Feature 2: E-commerce and express delivery companies "vertically and horizontally"

In 2022, e-commerce and express delivery companies will accelerate cooperation and integration. In September last year, JD Logistics completed the equity acquisition, and finally held a total of 71.93% of the equity of Debang shares. The founder of Deppon withdrew from management and remained relatively independent.

On November 18, JD Logistics (HKEx stock code: 2618) released its financial report for the third quarter of 2022. As of the third quarter of September 30, 2022, JD Logistics merged Deppon (603056. SH) performance, revenue reached 35.771 billion yuan, a year-on-year increase of 38.9%.

Chen Hudong, a special researcher at the e-commerce research center of NetEconomics, believes that Debang's official entry into large-scale express delivery in 2018 can be said to have created a bloody road in large-scale express delivery under 60 kilograms, thus linking LTL and express. In fact, including LTL express and many other models, such as express delivery, logistics market, etc., are not easy to do, and the acquisition is far better than doing it yourself. In recent years, the express market has been fiercely competitive, and the dividend has gradually decreased, so it is reasonable for JD.com to acquire Debang and integrate Debang's business. This also seems to tell us that the barriers formed by the supply chain do have a dividend period, and the express market without its own business flow will eventually be integrated, and the era of oligarchy may come early.

On September 19, JD.com announced that JD.com Express has recently accessed the Douyin e-commerce "Yinqida" service, which will provide Douyin users with home delivery and other delivery services.

Mo Daiqing, director of the online retail department and senior analyst of the e-commerce research center of NetEconomics, said that the logistics express industry is fiercely competitive, Tongda, SF, and Cainiao Network do not hesitate to sacrifice some profits in exchange for the market, at the same time, Jitu is developing rapidly, and Fengwang seizes the e-commerce market share. The competition on the track is fierce, so for e-commerce companies such as Jingdong and Alibaba, it is necessary to continuously develop resources in logistics, independently innovate to drive more customer groups, and achieve a continuous "hematopoietic cycle".

Feature 3: Instant delivery into the direction of giant plus

Instant retail has become the direction of various giants to increase the code, Jingdong and Dada have created instant retail, Meituan has Meituan flash sale, Meituan buy vegetables, Ali has Hema , Taoxianda, Tmall supermarket, etc., Pinduoduo makes efforts to match in the same city 24 hours a day. At the same time, as the competition in the instant retail market intensifies, coupled with the large market space, more and more players will enter it.

On April 19, Pinduoduo began to recruit merchants capable of delivering within 24 hours in Beijing, Shanghai, Guangzhou and Shenzhen, mainly fruit categories. At the same time, flowers, low-temperature milk, and cake merchants can also apply for matching in the same city in Pinduoduo, and the platform will label them to attract traffic.

On the evening of December 5, Dada, SF City, and Flashsend successively announced that they had reached a cooperation with Douyin Life Service to provide intra-city delivery solutions for catering merchants.

Chen Hudong, a special researcher of the E-commerce Research Center of NetEconomics, believes that "timeliness" is the most basic requirement of instant retail, and from the essence, timeliness largely depends on the quality requirements of goods. For example, the catering category of the takeaway platform, the fresh food category of the fresh e-commerce platform, and the flower category of the flower e-commerce (these three categories are currently the main categories of goods carried by the real-time logistics business), these products themselves have timeliness requirements, so it is natural to quickly deliver the goods to consumers in the form of instant delivery.

"Instant retail is a retail method in FMCG, which essentially meets the requirements of timeliness, because it is FMCG, which can be delivered directly to customers from the front warehouse, and the capacity undertaken is express brother, so this capacity is very flexible, but also very convenient, and the whole vehicle transportation is very different." Especially during the pandemic, we have all seen the supporting role of the group of couriers as the last mile capacity of the city. Therefore, the development of the instant retail model, with its flexibility and timeliness, has become the direction that major e-commerce giants have paid attention to. Chen Hudong further added.

Feature 4: Cross-border logistics capital competition Giants continue to increase their weight

On March 28, Commodity City plans to invest 2.444 billion yuan to build a cross-border e-commerce logistics park; on April 22, Amazon will invest $1 billion in "blood transfusion" logistics to open Prime; On April 28, Saiwei Times entered the game to increase logistics; On May 6, Shopify announced its $2.1 billion acquisition of logistics service provider Deliverr. In terms of investment and financing, on March 31, Wuxuanda completed a series A financing of hundreds of millions of yuan; On June 6, Yunqu announced the acquisition of cross-border e-commerce logistics service provider COPE.

Zhang Zhouping, senior analyst of the B2B and cross-border e-commerce department of the e-commerce center network of NetEconomics, said that although China's cross-border e-commerce logistics in 2022 was affected by the epidemic and the cross-border e-commerce industry, it suffered setbacks in development. However, as an important part of the whole industry chain of cross-border e-commerce, cross-border logistics plays an important role in the "last mile" of cross-border e-commerce, and the broad development prospects have also attracted the attention of giants and capital markets. In 2022, cross-border logistics enterprises such as Shunyou Logistics, Yuancang Overseas Warehouse, Platypus, Yima Technology, Topway Tianhai, Sea Butler, Wuxuanda, Daoke Intelligence, and Yunwujie will receive financing, including: Platypus, Worry-free, and Haibutler will receive a large financing of more than 100 million yuan.

"With the vigorous development of the cross-border e-commerce industry, it has brought new opportunities for the development of cross-border logistics. At present, the cross-border e-commerce logistics track still has great market development prospects. But there are many competitors, and each company is getting a share of the market. Such as Zongteng Group, Diesifang, Yanwen Logistics, Yun Qunar, Huanshi Logistics, etc. have occupied a place in the market, but the market is large and scattered, which also brings more development opportunities to more new entrants. Zhang Zhouping said.

Feature 5: The city freight platform is in chaos

The same city freight has been in chaos this year, and it has been spent in rectification, interviews, etc. In January, the Office of the Inter-ministerial Joint Conference on the Collaborative Supervision of New Transportation Formats interviewed four Internet road freight platform companies, including Manbang, Lalala, Didi Freight, and Kuaigou Taxi. In the same month, the Shanghai Municipal Traffic Law Enforcement Department and the Public Security Traffic Police Department concentrated on interviewing three online freight platforms: "Didi Freight", "Lalala" and "Kuaigou".

In February, the Enforcement Corps of the Traffic Commission interviewed Didi Freight, Kuaigou Taxi, and Lalala, explicitly requiring the platforms to conduct a comprehensive review of registered vehicles operating in Shanghai, ensure the authenticity of vehicle personnel information, prohibit unqualified vehicles and personnel from entering the platform, and formulate a plan for the removal and return of illegal vehicles.

In August, the Office of the Inter-ministerial Joint Conference on the Collaborative Supervision of New Transportation Formats conducted reminder interviews with four Internet road freight platform companies, namely Manbang Group, Lalala, Didi Freight, and Kuaigou Taxi.

In November, the Office of the Inter-ministerial Joint Conference on the Collaborative Supervision of New Transportation Formats recently interviewed Lalala Company and reminded three Internet road freight platform companies, Manbang Group, Didi Freight and Kuaigou Taxi.

In this regard, Chen Liteng, a digital life analyst at the e-commerce research center of NetEconomics, believes that after the early burning of money to attract customers and get listed, the intra-city freight platform is facing the problem of profitability and is difficult to solve, which also leads to chaos in the Internet freight platform. Over the past year, Internet freight platform companies have been suspected of infringing on the legitimate rights and interests of employees due to arbitrary adjustment of pricing rules, increase of membership fees, inducing vicious low-price competition, and illegal transportation over limits and overloads, which has caused widespread dissatisfaction among truck drivers and widespread concern in society, and has also been interviewed by national and local regulatory authorities. However, with the upgrading of digital technology, the continuous improvement of enterprise operation capabilities, and the continuous standardization of market supervision, the intra-city freight industry will usher in a benign development.

Feature 6: Visualize the whole process of logistics supply chain and accelerate the implementation of technology

In this year's "June 18" e-commerce promotion, JD Logistics announced a comprehensive upgrade of the "Trinity" supply chain technology, and the average accuracy of full-link prediction such as warehousing, transportation and distribution exceeded 95%.

Chen Hudong, a special researcher at the e-commerce research center of NetEconomics, said that the whole process of logistics supply chain visualization technology is accelerating. By integrating cloud solutions of order management (OMS), transportation management (TMS), warehouse management (WMS), appointment management (AMS), supply chain control tower (SCCT), or realize the effective coordination of some management links, so as to realize the whole process of logistics supply chain visual management, which is also an important feature of logistics technology in 2022, many logistics technology companies and logistics supply chain companies are accelerating their layout in this field.

Logistics Technology Industry Trend Forecast: Low Carbon, Digital and Intelligent

Trend 1: Combining the logistics industry with low-carbon technologies

During the 618 period in 2022, Cainiao Green Home, the first green carbon reduction online interactive community in the express delivery industry, was opened to merchants, joining hands with Cainiao to promote express packaging recycling. Green Home is an online green carbon reduction position created by Cainiao for hundreds of millions of express delivery consumers. Cainiao's "Return Package" covers nearly 100,000 Cainiao stations in 315 cities in 31 provinces (autonomous regions and municipalities directly under the central government) across the country, and can recycle hundreds of millions of express cartons every year.

The logistics industry is combined with low-carbon technologies. The use of distribution vehicles and new energy vehicles in the logistics industry is gradually spreading. As an important application equipment of low-carbon technology, new energy vehicles are accelerating the elimination of traditional fuel vehicles in the logistics industry and becoming an important distribution force in the logistics market.

Trend 2: AI has become an important scenario application technology in the logistics supply chain industry

JD.com's "industrial AI" makes logistics more efficient. More than 400 intelligent express vehicles put into use by JD Logistics in more than 25 cities across the country have become an important supporting force for the end-of-line distribution of JD.com's supply chain. In the Wolf Robot Warehouse of JD Logistics Asia No. 1 Intelligent Industrial Park, the picker and the robot "Wolf" have a clear division of labor, and this "human-machine collaboration" mode effectively improves the picking efficiency by more than 3 times.

Chen Hudong said that AI has become an important scenario application technology in the logistics supply chain industry. Logistics scenarios are becoming the next market for AI, and AI has capabilities such as data analysis, program optimization, risk prediction, and scenario mode setting, which are being applied in the logistics field, covering a variety of scenarios in the logistics field, such as distribution, warehousing, sorting, and so on. AI technology may change or subvert the current way of operation and operation of the logistics industry.

Trend 3: Logistics digitalization is becoming an important direction to promote the transformation of the logistics industry

On December 15, the General Office of the State Council issued the "14th Five-Year Plan" Modern Logistics Development Plan, proposing that by 2025, a modern logistics system that adapts to supply and demand, connects internally and externally, is safe and efficient, smart and green will be basically built.

In Chen Hudong's view, logistics digitalization is becoming an important direction to promote the transformation of the logistics industry. 2022 can be said to be a year with a high voice for the digital economy, the state has introduced a number of policies to encourage the development of the digital industry, new models and formats of the digital economy in the logistics supply chain industry continue to emerge, and the logistics operation model accelerates innovation and iteration.