China Business Daily (Reporter Jiang Yongxia) Recently, a reporter from China Business Daily found that the "SF Express +" WeChat mini-program officially launched the "Online Shopping Return" function, and when using the return function, users should first apply for a return refund on the e-commerce platform, and then operate the return process after obtaining the consent of the merchant.
It is understood that the service is consistent with the SF Standard Express service, but the price is lower than that of the Standard Express. Even compared with the "Tongda Department" door-to-door pickup price recommended by the e-commerce platform, SF's "online shopping return" also has a fight in some areas.
SF Express, which once faded out of the e-commerce economic parts market, has now launched special services in social parts, what is the intention?
The "SF Express+" WeChat Mini Program officially launched the "Online Shopping Return" function, which is the same as SF Standard Express's service, but the price is lower than that of Standard Express. (China Business Daily reporter Jiang Yongxia/photo)
Price reduction competition for "online shopping returns"
The reporter noticed that the "SF Express +" WeChat mini-program has opened a special section "Online Shopping Returns", users apply for returns and refunds on the e-commerce platform, and after the merchant's consent, click to enter the business section, and upload a screenshot of the return in the return address column to use the service. Returns from mainstream e-commerce platforms such as Taobao Tmall, Pinduoduo, Douyin, JD.com, and Kuaishou can all use SF's service.
Online shopping return service interface. (Picture taken from "SF Express+" WeChat mini-program)
The opening of SF's new business has undoubtedly enriched consumers' online shopping and return channels, and also led to the improvement of services in this field. However, in the current market environment, SF Express's "online shopping returns" are facing considerable challenges if they want to gain market recognition.
As we all know, e-commerce platforms have carried out many rounds of upgrades in return services, and various platforms also have officially recommended door-to-door pickup services. After the consumer applies for a return and refund with the consent of the merchant, he can directly choose to pick up the parcel on the e-commerce platform, and then wait for the courier to come to the door on time, and there is no need to do anything else. The return shipping fee is also paid directly by the freight insurance, and there is no need for the consumer to pay in advance.
To use SF's "Online Shopping Returns", consumers need to choose to return the goods by themselves, and then open the SF Mini Program, enter the "Online Shopping Returns" interface, upload the screenshot of the return, and place an order for payment. After these operations are completed, you must enter the return page of the e-commerce platform and upload the express tracking number. The relatively large number of operation processes first raised the threshold of SF's "online shopping returns".
SF's "Online Shopping Return" is the same as SF's Standard Express service, but the price is lower than that of Standard Express. (Picture taken from "SF Express+" WeChat mini-program)
It is understood that SF's "online shopping return" is the same as SF's standard express service, but the price is lower than that of standard express. For example, if an online purchase is returned to a merchant in Jinhua City from Beijing, the first shipping fee is 12 yuan if SF Express "Online Shopping Return" is used. For the same mailing address, SF freight is 18 yuan. Compared with the standard of 10 yuan for the first 10 yuan of non-local freight for door-to-door pick-up promoted by e-commerce platforms, SF's "online shopping return" has lost its price advantage. However, now in terms of e-commerce returns, the gap between SF Express and the "Tongda Department" has been greatly reduced, and adding 2 yuan to use SF Express services may also make some consumers excited.
In addition, the reporter also noticed that at present, SF Express has launched a 5% discount on "online shopping returns", but each user can only enjoy the discount once.
It has diluted the e-commerce preferential business
In fact, this is not the first time that SF Express has tried to develop the e-commerce parts business. In the past few years, SF Express has also tried to launch economic express mail to increase its market share. However, the volume and profit could not be both, and in the end, SF Express diluted the economic express business.
In May 2019, SF launched a special product for the e-commerce market and customers, which is a key move for the company to adjust its business strategy for economic parts. The rapid development of preferential products has led to a rapid increase in the revenue scale and market share of economic products.
However, the rapid growth of economic parts has affected SF's overall profit. In the first half of 2021, SF's net profit growth rate declined, and the net profit attributable to shareholders of listed companies was 760 million yuan, a year-on-year decrease of 79.80%. For the sharp decline in net profit in the first half of the year, a key reason is that the relatively low-priced economic express product business proportion increased too quickly, resulting in pressure on gross profit. Among them, it is worth noting that the e-commerce economy has pulled down profits.
Subsequently, SF took the initiative to optimize its product structure, and since the second half of 2021, the business volume of low-margin products has decreased year-on-year. In the first half of 2022, SF's economic express business achieved an operating income of RMB11.81 billion excluding tax, down 7.3% year-on-year. The proportion of economic express business revenue to total revenue also decreased, accounting for 9.1% in the first half of 2022, compared with 14.4% in the same period last year.
Fight again in a different channel
Why is SF once again focusing on the e-commerce business?
It is worth noting that online shopping returns are different from the traditional e-commerce business, for SF, this business is closer to social parts, and the unit price of the service is not low.
As we all know, the traditional e-commerce parts of express delivery companies are mainly for the receipt of merchant customers, and the market price competition is very fierce, and two or three yuan per piece is the average price of the industry. Even if SF Express reduces the price of e-commerce parts to four or five yuan, it will be twice as expensive as the "Tongda Department". Such a low price will put great pressure on SF's performance.
On the return side, SF's price is not much different from its peers, which makes SF dare to attack again. It is reported that the return price of online shopping in the "Tongda Department" is 10 yuan in different places, and SF Express is 12 yuan. Although there is a gap of 2 yuan, with its own high-quality express delivery service, SF may think that there are still many possibilities for this business.
In addition, for economic express, SF Express can be described as "love and hate". In the past, because of the increase in the number of orders, the profit decreased. Now that profits are growing steadily, the growth rate of revenue has begun to decline again, which has to make SF once again see the sharp tool for incremental revenue increase - economic parts. According to SF's financial report for the third quarter of 2023, SF's revenue in the third quarter was 64.646 billion yuan, a slight decrease of 6.42% year-on-year, and its revenue in the first three quarters was 189.012 billion yuan, a year-on-year decrease of 5.09%.
Although SF's business volume and market share have increased in recent years, there is still a big gap compared with the "access system". In the fiercely competitive and ever-changing express delivery market, SF Express has to speed up its pace and explore new performance growth points.